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.