Flowserve (FLS) is set for improved margins into 2026 and beyond following a $490 million nuclear valve bolt-on deal, and issuance of 2030 financial targets, RBC Capital Markets said in a note Sunday.

The company set 2026 adjusted EPS guidance about 3% above consensus, even as it framed a softer 1% to 3% organic sales growth and slower backlog conversion because nuclear projects are spaced over longer time frames, RBC said.

Management's forecast of at least double-digit growth in nuclear and traditional power bookings, with nuclear activity building in H2, signals strong power infrastructure spending ahead, the brokerage said.

The company's 2030 targets imply margin expansion, with the adjusted operating margin target of about 20% by the end of 2030 viewed as "notably positive" considering the company achieved its 2027 adjusted operating margin target two years earlier than planned, according to the note.

Flowserve agreed to buy nuclear valves and actuators for $490 million, which looks reasonably priced as the deal expands Flowserve's nuclear power plant total market opportunity by 15% to 20%, the note added.

Q4 operating beat was driven by stronger margins in both segments, reinforcing RBC's view that self-help efforts and operational excellence can keep lifting profitability, the investment firm said.

RBC Capital Markets raised its price target to $96 from $83, and kept its outperform rating on the stock.

Price: 86.19, Change: +0.69, Percent Change: +0.81