UPDATE: Oppenheimer Initiates Flowserve at Outperform on Growth and Margin Expansion

Oppenheimer initiated coverage on Flowserve

with an Outperform rating and a $175 price target. Oppenheimer commented, "We believe market-leading aftermarket capabilities lend cyclical resiliency, and significant operational upgrades along with a more efficient capital structure should drive ROE north of 25% in 2013 and beyond. We anticipate that FLS shares will command a premium multiple vs. the overall market and their peer set given these factors, and that the shares could approach a high-teens P/E, especially once long-cycle revenue growth accelerates. In the meantime, we more conservatively target 16.5x our '13E EPS, or $175." Flowserve closed at $141.91 on Tuesday.