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Parker Hannifin Corp PH

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Morningstar’s Analysis

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Capital Allocation


Solid Fiscal First-Quarter Performance Prompts Us to Lift Parker’s FVE; Stock Fully Baked

Joshua Aguilar Equity Analyst

Analyst Note

| Joshua Aguilar |

After reviewing narrow-moat-rated Parker Hannifin’s fiscal 2022 first-quarter results, we lift our fair value estimate to $296 per share from $276 previously, primarily due to a higher midcycle margin assumption. Our valuation change translates to a 7% raise on 30% normalized incremental margins. The move in our calculation of intrinsic value remains in line with the stock’s reaction during the trading day. While we agree with the market’s assessment of the latest news, we believe most of Parker Hannifin’s positive, fundamental upside is baked into the stock.

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Company Profile

Business Description

Parker Hannifin is an industrial conglomerate operating two segments: diversified industrial, which serves a variety of end markets, and aerospace systems, which sells engine and actuation components. The diversified industrial segment consists of six groups, including engineered materials (sealing devices), filtration (filters and systems monitoring and removing contaminants from liquids and gases), fluid connectors (valves, couplings, and other fittings), instrumentation (flow manufacturing components and fluid control applications), and motion systems (hydraulic, pneumatic, and electromechanical components in industrial machinery and equipment). The segment boasts 15,500 independent distributors, and about 40% of its business occurs outside the United States.

6035 Parkland Boulevard
Cleveland, OH, 44124-4141
T +1 216 896-3000
Sector Industrials
Industry Specialty Industrial Machinery
Most Recent Earnings Sep 30, 2021
Fiscal Year End Jun 30, 2022
Stock Type Cyclical
Employees 54,640