Flowserve shares climb after BMO Capital upgrade

Shares of Flowserve Corp. rose Monday after a BMO Capital Markets analyst lifted his rating on the pump, valve and seal manufacturer, saying shares are cheaply priced after a recent sell-off.

The stock added $7.37, or 6.4 percent, to $122.02 Monday.

Charles Brady raised the Irving, Texas, company to "Outperform" from "Market Perform" in a client note early Monday. Shares are trading at a "compelling" price following a sharp decline last week, he said, and there is no weakening in demand among its oil, gas, chemical and power markets.

Last week, Flowserve shares lost $22.05, or 16.1 percent, to close Thursday at $114.65. The stock is still up 19 percent since the start of the year.

In addition, Brady said Flowserve is positioned to continue to see strong bookings and sales growth. The company should also enjoy improved operating margins through 2010 thanks to better pricing, aftermarket sales and efficiency.

"We believe Flowserve is in the midst of a multiyear uptick in top-line revenue growth, margin expansion and earnings growth," Brady wrote.

The analyst raised his price target to $155 from $130, implying he expects shares to gain 35 percent over Thursday's close. He also raised his earnings forecast for the next three years above consensus estimates from analysts polled by Thomson Financial.