Investing.com -- TD Cowen downgraded Flowserve to Hold from Buy, warning that the industrial flow-control company's near-term outlook may require recalibration as geopolitical disruptions continue to weigh on growth prospects.

The brokerage also cut its price target to $70 from $85 on the company's stock.

The brokerage said Flowserve faces a difficult setup ahead of upcoming results, with management potentially needing to lower expectations after operational disruptions linked to the Iran conflict. While TD Cowen remains positive on the company's long-term positioning tied to rising global electricity-generation demand, it believes near-term revenue growth is likely to remain under pressure.

Analysts highlighted concerns that the company has not yet incorporated sufficient contingency assumptions into its second-half outlook. Flowserve previously indicated a roughly $25 million impact to second-quarter results, similar to the first quarter, but TD Cowen argued that ongoing operational constraints could ultimately lead revenue effects to trend closer to the larger order impact seen earlier in the year.

The firm also questioned management's expectations for mid-single-digit order growth in 2026, saying downside risks outweigh upside potential. If second-quarter orders resemble the weaker first-quarter performance, the acceleration required in the second half of the year appears increasingly unlikely, according to the note.

TD Cowen said a guidance reduction could ultimately be healthy for investor confidence, noting that maintaining the current earnings outlook while signaling results at the low end of the range could leave markets anticipating a future cut. The brokerage added that weaker order trends this year could also pressure revenue expectations for 2027, particularly as delays in Middle East and energy-related projects ripple into future periods.

Despite the downgrade, TD Cowen said it continues to view Flowserve's long-term exposure to power generation and infrastructure investment favorably, but believes investors may need to reset expectations for growth over the coming quarters.