Is Flowserve (FLS) a Buy for Long-Term Investors Amid Institutional Conviction and Strong Operational Momentum?

Flowserve Corporation (NYSE: FLS) has emerged as a focal point for long-term investors, driven by a combination of robust institutional conviction and operational momentum. This analysis evaluates whether the industrial valve and sealing solutions provider is a compelling buy, leveraging insights from recent institutional ownership trends and operational performance metrics.

Institutional Conviction: A Barometer of Confidence

Institutional ownership of Flowserve has remained a key indicator of market confidence. As of late 2025, , with major players like BlackRock, Inc. , Inc. (10.39%) maintaining significant stakes according to DCF Modeling. Notably, D1 Capital Partners L.P. , . equity portfolio. This strategic allocation underscores institutional recognition of Flowserve's operational resilience and strategic initiatives, such as its 3D Growth Strategy and Flowserve Business System.

Other notable shifts include in Q3 2025, , acquiring 429,256 shares valued at $22.47 million according to MarketBeat data. Conversely, some institutions, like Universal Beteiligungs und Servicegesellschaft mbH, reduced their positions by 58.6%, highlighting the nuanced nature of institutional sentiment. Despite these divergences, the overall trend reflects a net inflow of capital, .

Operational Momentum: Margin Expansion and Strategic Execution

Flowserve's operational performance in 2025 has been marked by margin expansion and disciplined capital allocation. For Q3 2025, the company , . Gross margins improved to 32.4% and 34.8% (adjusted), , respectively. These gains were driven by cost optimization and pricing discipline, supported by the .

In Q4 2024, the company further demonstrated its operational strength, . , compared to 2024. Additionally, Flowserve during Q3 2025, .

However, challenges persist. The company's decision to divest legacy asbestos liabilities, , excluded from adjusted EPS. This trade-off highlights the balance between short-term pain and long-term gain, a critical consideration for long-term investors.

Balancing Risks and Rewards

While Flowserve's operational metrics are largely positive, investors must weigh recent adjustments to growth expectations. Organic sales growth guidance for 2025 was , reflecting macroeconomic headwinds. Additionally, fell short of estimates, . These mixed signals underscore the importance of monitoring execution against revised targets.

Institutional ownership trends, however, remain a tailwind. The influx of capital from firms like D1 Capital Partners and Boston Partners suggests continued faith in Flowserve's ability to navigate these challenges. With a , the company is well-positioned to sustain revenue visibility, particularly in high-growth areas like nuclear power and aftermarket services.

Conclusion: A Buy for the Long-Term

Flowserve's combination of institutional conviction and operational momentum positions it as a compelling long-term investment. The company's margin expansion, strategic divestitures, and robust cash flow generation align with the priorities of value-conscious investors. While near-term guidance adjustments and asbestos-related costs introduce volatility, . For investors with a multi-year horizon, the current valuation and institutional support make FLS a buy.