/Parker-Hannifin%20Corp_%20factory-by%20Jonathan%20Weiss%20via%20Shutterstock.jpg)
Parker-Hannifin Corporation (PH), headquartered in Cleveland, Ohio, is renowned as a leader in motion and control technologies. Valued at $65.15 billion by market cap, the company serves customers in a wide range of diversified industrial and aerospace markets. PH’s engineering and aerospace expertise spans the core motion and control technologies—electromechanical, hydraulic, and pneumatic, fluid and gas handling, filtration, engineered materials, climate control, and process control.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and PH perfectly fits into that category, signifying its substantial size, stability, and dominance in its industry.
The motion and control major has fallen 11.1% from its 52-week high of $570.15, which it hit on Apr. 4. Shares of PH are down 5.5% over the past three months, underperforming the broader Industrials ETF Vanguard’s (VIS) marginal gains over the same time frame.
Longer term, PH shares have risen 37.3% over the past year, and in 2024, the stock is up 10%. By contrast, the VIS is up 7.9% on a YTD basis and 18.2% over the past 52 weeks.
PH has been trading below its 50-day moving average since mid-May but above its 200-day moving average since late October 2022.
On Jun. 14, PH shares closed down more than 5% as industrial stocks fell after MSC Industrial Direct Co., Inc. (MSM) reported poor preliminary Q3 adjusted EPS between $1.32 and $1.34, weaker than the consensus adjusted EPS of $1.57. It also cut its adjusted operating margin estimate to between 10.5% and 10.7% from the previous estimate of between 12% and 12.8%, citing ongoing heavy manufacturing softness and the slower-than-anticipated ramp in its core customers.
On Jun. 3, PH shares closed down more than 3% after the May ISM manufacturing index fell more than expected.
PH’s overall performance can be attributed to its optimistic outlook for the fiscal year ending June 30. The company expects its adjusted EPS to come between $24.65 and $24.85, up from the previous guidance of $23.90 and $24.50. It expects total sales growth to be approximately 4%, compared to the previous guidance between 3% and 5%. PH anticipates its adjusted operating margin to be 24.6%.
Rival ITT Inc. (ITT) has underperformed PH with 9.8% gains on a YTD basis. However, ITT’s 46.8% gains over the past 52 weeks outshine PH’s returns over this period.
Despite its recent underperformance compared to other industrial stocks, analysts are optimistic about PH’s prospects. The stock has a consensus rating of “Strong Buy” from the 16 analysts covering it, and the mean price target of $622.92 is a 22.9% premium to current levels.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
