GEAGY - SPX FLOW's Go-It-Alone Strategy Is A Reasonable Bet On Its Turnaround Plan
- SPX FLOW has launched a strategic review after receiving unsolicited interest from Ingersoll Rand, but a substantially higher bid from another player doesn't seem particularly likely.
- Management will likely choose to bet on itself and its turnaround strategy, a strategy predicated on prioritizing higher-value product/project opportunities in faster-growing markets and turning away lower-return business.
- Mid-single-digit revenue growth and mid-to-high single-digit FCF growth can drive a high single-digit return from here, and successfully executing the plan will generate a better long-term return than IR's bid.
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SPX FLOW's Go-It-Alone Strategy Is A Reasonable Bet On Its Turnaround Plan