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Cleveland, Ohio-based Parker-Hannifin Corporation (PH) is a leading diversified industrial manufacturer with a market cap of $76 billion. The company specializes in motion and control technologies, offering a wide range of products, including motion-control and fluid systems, industrial components, flight control, hydraulic and fluid conveyance systems, thermal management, and pneumatic and lubrication systems. These products serve various markets, with a significant focus on the aerospace sector.
Shares of this industrial giant have outperformed the broader market considerably over the past year. PH has gained 46.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27.7%. In 2024, PH stock is up 28.1%, surpassing SPX’s 18% rise on a YTD basis.
Zooming in further, PH’s outperformance looks more pronounced compared to the iShares U.S. Industrials ETF (IYJ). The exchange-traded fund has gained about 21.4% over the past year. Moreover, PH’s gains on a YTD basis outshine the ETF’s 11.9% returns over the same time frame.
PH’s overall performance can be attributed to solid demand for its motion and control technologies, strong growth in orders, and operational improvement. The acquisition of British aerospace and defense company Meggitt for $8 billion has further boosted the company's performance.
On Aug. 8, PH shares closed up more than 10% after reporting its Q4 earnings results. Its adjusted EPS of $6.77 topped Wall Street’s expectations of $6.23, and its revenue was $5.2 billion, surpassing forecasts of $5.1 billion. PH expects fiscal 2025 adjusted EPS to be between $26.30 and $27, and revenue growth is anticipated to be between 1.5% and 4.5%.
For the current fiscal year, ending in June 2025, analysts expect Parker-Hannifin’s EPS to grow 4.6% year over year to $26.61 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 17 analysts covering PH stock, the consensus is a “Strong Buy.” That’s based on 14 “Strong Buy” ratings, one “Moderate Buy,” and two “Holds.”
The configuration has been fairly stable over the past months.
On Aug. 25, Wells Fargo & Company (WFC) analyst Joe O’Dea maintained a “Buy” rating on PH with a price target of $640, implying a potential upside of 8.5% from current levels.
The mean price target of $643.43 represents a 9% premium from PH’s current price levels. The Street-high price target of $717 suggests an upside potential of 21.5%.
On the date of publication, Neha Panjwani 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.
