Parker Hannifin
PH
$949.17
+1.07%
Parker-Hannifin Corporation is a global leader in motion and control technologies, providing critical components such as hydraulic, electromechanical, and filtration systems for aerospace, industrial, and mobile markets. The company's competitive identity is built on its extensive portfolio of branded components and a high degree of cross-selling across diversified end markets, making it a key supplier in the industrial machinery space. The current investor narrative centers on Parker's ability to sustain growth through strategic acquisitions, as evidenced by its recent deal to acquire CIRCOR's aerospace business, which is expected to boost margins and earnings. Additionally, the stock has shown strong momentum in recent months, with a 15.1% gain over the past month, outpacing the broader market.…
PH
Parker Hannifin
$949.17
Related headlines
Investment Opinion: Should I buy PH Today?
Rating: Buy. Thesis: Parker-Hannifin offers a compelling risk/reward with strong fundamental momentum, reasonable valuation, and significant upside to analyst targets, supported by strategic acquisitions and margin expansion.
Supporting Evidence: The trailing P/E of 25.38x is justified by a net margin of 17.9% (vs. industry 10%) and ROE of 25.8%. Revenue grew 9.1% YoY to $5,174 million, with operating margin improving to 21.1%. Free cash flow of $3,340 million provides financial flexibility. The implied analyst target of $1,275 offers +32.4% upside, and the PEG ratio of 1.04 indicates fair value relative to growth.
Risks & Conditions: Key risks include integration of CIRCOR, cyclical slowdown, and multiple compression. This Buy rating would be downgraded to Hold if revenue growth falls below 5% or net margin drops below 15%. It would be upgraded to Strong Buy if the stock pulls back to $850 (P/E ~22x) while fundamentals remain intact. Overall, the stock is fairly valued relative to its growth and profitability, with a reasonable premium to peers.
Sign up to view all
PH 12-Month Price Forecast
Parker-Hannifin's strong fundamental profile—double-digit revenue growth, industry-leading margins, and robust free cash flow—supports a bullish stance. The valuation is reasonable given the growth trajectory, and the CIRCOR acquisition provides a clear catalyst. However, the stock's proximity to its 52-week high and premium P/E relative to peers warrant medium confidence. Key developments to watch include the next earnings report (expected in late October 2026) and integration updates on CIRCOR. A downgrade to neutral would occur if revenue growth decelerates below 5% or if margins show sustained compression.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Parker Hannifin's 12-month outlook, with a consensus price target around $1233.92 and implied upside of +30.0% versus the current price.
Average Target
$1233.92
6 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
6
covering this stock
Price Range
$759 - $1234
Analyst target range
Parker-Hannifin is covered by 6 analysts, with a consensus leaning bullish. The distribution includes 4 Buy/Overweight ratings, 1 Hold, and 1 Sell (implied from the Equal Weight rating). The average target price is not explicitly provided, but based on the estimated EPS of $45.19 and a forward P/E of 28.23x, the implied target is approximately $1,275. This suggests an upside of +32.4% from the current price of $962.89. The consensus recommendation is Overweight, indicating positive sentiment. The target range, based on EPS estimates, spans from a low of $1,250 (using low EPS of $44.31 and same P/E) to a high of $1,334 (using high EPS of $47.25). The high target assumes continued margin expansion and successful integration of the CIRCOR acquisition, while the low target factors in potential headwinds from economic slowdown or integration risks. Recent ratings from major firms like BMO Capital (Outperform), Barclays (Overweight), and JP Morgan (Overweight) reinforce the bullish outlook. The spread between high and low targets is about 6.7%, indicating relatively high conviction among analysts. The absence of recent downgrades suggests stability in expectations.
Drowning in data?
Find the real signal!
Bulls vs Bears: PH Investment Factors
Parker-Hannifin presents a compelling bull case driven by strong revenue growth (9.1% YoY), superior profitability (net margin 17.9% vs. industry 10%), and a reasonable PEG ratio of 1.04. The bullish analyst consensus with +32.4% upside potential supports positive sentiment. However, the stock trades near its 52-week high, carries a premium valuation (P/E 25.38x vs. industry 22x), and faces integration risks from the CIRCOR acquisition. The single most important tension is whether the company can sustain its growth and margin expansion to justify the premium multiple; if it does, the stock could reach analyst targets, but any disappointment could trigger multiple compression and a decline toward the 52-week low. Currently, the bull case has stronger evidence given the fundamental momentum and analyst support, but investors should monitor execution closely.
Bullish
- Strong Revenue Growth Momentum: Parker-Hannifin's Q2 FY2026 revenue of $5,174 million grew 9.1% YoY, driven by both the Diversified Industrial (67% of revenue) and Aerospace Systems (33%) segments. This consistent growth, coupled with the CIRCOR aerospace acquisition, positions the company for continued top-line expansion.
- Superior Profitability vs. Peers: Net margin of 17.9% (TTM) significantly exceeds the industrial machinery industry average of ~10%, while ROE of 25.8% demonstrates efficient capital use. Operating margin improved to 21.1% in Q2 FY2026 from 20.3% a year ago, reflecting operational leverage and cost controls.
- Attractive Valuation with PEG Near 1.0: The PEG ratio of 1.04 suggests the stock is fairly valued relative to its earnings growth rate. Despite a trailing P/E of 25.38x (15% premium to industry average of 22x), the premium is justified by superior margins and growth, and the forward P/E of 28.23x implies expected earnings acceleration.
- Strong Free Cash Flow Generation: Trailing twelve-month free cash flow of $3,340 million provides ample liquidity for acquisitions (like CIRCOR) and shareholder returns. Operating cash flow of $862 million in Q2 FY2026 easily covered capex of $94 million, indicating a cash-rich business model.
Bearish
- Stock Near 52-Week High, Limited Margin of Safety: At $962.89, the stock trades at 93% of its 52-week high of $1,034.96, leaving only ~7.5% upside to that resistance level. The beta of 1.11 implies higher volatility, and the stock is vulnerable to profit-taking or macro shocks that could drive it back toward the 52-week low of $692.02 (-28% downside).
- Premium Valuation Could Compress: The trailing P/E of 25.38x is above the industry average of 22x and near the middle of its historical range (17.7x-32.8x). If growth decelerates or margins contract, the multiple could compress toward the historical average of ~22x, implying a ~13% downside from current levels.
- Integration Risks from CIRCOR Acquisition: The acquisition of CIRCOR's aerospace business, while strategically sound, carries execution risk. Any delays in integration, cost synergies, or customer retention could pressure margins and earnings. The deal adds leverage (debt-to-equity at 0.70) and may temporarily dilute ROE.
- Cyclical Exposure to Industrial End Markets: Parker's revenue is tied to industrial and aerospace cycles. A potential economic slowdown or recession could reduce demand for hydraulic, electromechanical, and filtration systems. The 1-month relative strength of +16.38% vs. S&P 500's -1.25% may reflect unsustainable momentum.
PH Technical Analysis
Parker-Hannifin is in a sustained uptrend over the long term, with a 1-year price change of +35.34%, significantly outperforming the S&P 500's 19.1% gain. The current price of $962.89 sits at 93.0% of its 52-week range ($692.02 - $1034.96), indicating the stock is near the upper end of its range, which suggests strong momentum but also potential overextension. This positioning near highs reflects investor confidence in the company's growth trajectory and recent strategic moves. Short-term momentum is accelerating, with a 1-month price change of +15.13% and a 3-month change of +6.04%, both positive and diverging from the longer-term trend. The 1-month gain is particularly robust, contrasting with the S&P 500's -1.25% decline over the same period, signaling strong relative strength. This divergence suggests that recent catalysts, such as the CIRCOR acquisition, are driving renewed buying interest, though the 3-month figure is more moderate, indicating some consolidation after the broader market pullback in early 2026. Key technical support lies near the 52-week low of $692.02, while resistance is at the 52-week high of $1034.96. A breakout above $1034.96 would signal a continuation of the uptrend, potentially targeting new highs, while a breakdown below $692.02 would indicate a bearish reversal. The stock's beta of 1.11 implies it is 11% more volatile than the market, meaning it tends to amplify market moves, which is important for risk management.
Beta
1.11
1.11x market volatility
Max Drawdown
-19.5%
Largest decline past year
52-Week Range
$692-$1035
Price range past year
Annual Return
+34.1%
Cumulative gain past year
| Period | PH Return | S&P 500 |
|---|---|---|
| 1m | +4.8% | +2.0% |
| 3m | -3.6% | +10.6% |
| 6m | +3.1% | +8.3% |
| 1y | +34.1% | +20.4% |
| ytd | +6.2% | +10.2% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
PH Fundamental Analysis
Parker-Hannifin's revenue trajectory is growing, with the most recent quarterly revenue (Q2 FY2026) of $5,174 million, up 9.1% year-over-year from $4,743 million in the prior-year quarter. The multi-quarter trend shows consistent growth, with revenue increasing from $4,960 million in Q3 FY2025 to $5,243 million in Q4 FY2025, and then to $5,084 million in Q1 FY2026. The Diversified Industrial segment contributed $3,468 million (67% of total) and the Aerospace Systems segment $1,706 million (33%), with both segments driving growth. The 9.1% YoY growth rate indicates healthy demand, and the acquisition of CIRCOR's aerospace business is expected to further accelerate revenue and margin expansion. The company is highly profitable, with net income of $845 million in the most recent quarter and a net margin of 16.3%. Gross margin has been stable around 37.3%, while operating margin improved to 21.1% in Q2 FY2026 from 20.3% in the prior-year quarter, reflecting operational efficiency. The net margin of 16.3% is strong for the industrial machinery industry, where typical net margins range from 5-15%. Parker's profitability is supported by its high-margin aerospace business and cost controls. Parker-Hannifin maintains a solid balance sheet with a debt-to-equity ratio of 0.70, indicating moderate leverage. Free cash flow (FCF) for the trailing twelve months is $3,340 million, providing ample liquidity for acquisitions and shareholder returns. The company generated operating cash flow of $862 million in Q2 FY2026, easily covering capital expenditures of $94 million. Return on equity (ROE) is 25.8%, reflecting efficient use of shareholder capital. The current ratio of 1.19 suggests adequate short-term liquidity, though it is slightly below the 2.0 benchmark, which is common for industrial companies with strong cash flow generation.
Quarterly Revenue
$5.2B
2025-12
Revenue YoY Growth
+9.10%
YoY Comparison
Gross Margin
37.32%
Latest Quarter
Free Cash Flow
$3.3B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is PH Overvalued?
Since net income is positive, the primary valuation metric is the P/E ratio. The trailing P/E is 25.38x, while the forward P/E is 28.23x, indicating the market expects earnings growth. The gap between trailing and forward P/E suggests that analysts anticipate higher earnings in the coming year, which is consistent with the company's growth trajectory and acquisition-driven expansion. Compared to the industrial machinery industry average P/E of approximately 22x, Parker's trailing P/E of 25.38x represents a 15% premium. This premium is justified by the company's superior profitability (net margin of 17.9% vs. industry average of ~10%), strong ROE of 25.8%, and consistent revenue growth. The PEG ratio of 1.04 suggests the stock is fairly valued relative to its earnings growth rate, as a PEG near 1.0 is considered reasonable. Historically, Parker's trailing P/E has ranged from 17.7x (June 2023) to 32.8x (December 2025). The current 25.38x is near the middle of this range, indicating that the stock is not excessively overvalued relative to its own history. The P/B ratio of 6.55x is above the historical average of around 5x, reflecting the market's confidence in the company's intangible assets and brand value. Overall, the valuation appears reasonable given the company's strong fundamentals and growth prospects.
PE
25.4x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 18x~61x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
18.2x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Parker-Hannifin's debt-to-equity ratio of 0.70 indicates moderate leverage, which could become a burden if interest rates remain elevated or cash flow weakens. The company's net margin of 17.9%, while strong, is sensitive to input costs and pricing power; any compression could pressure earnings. Revenue concentration in industrial (67%) and aerospace (33%) segments exposes the company to cyclical downturns in these end markets. The trailing P/E of 25.38x leaves limited room for error, as a 10% earnings miss could trigger a 15-20% stock decline given the premium valuation.
Market & Competitive Risks: The stock's beta of 1.11 implies 11% higher volatility than the market, making it susceptible to macro shocks and sector rotation. The premium P/E of 25.38x vs. industry average of 22x could compress if growth slows or if the market rotates from growth to value. Competitive threats from other industrial conglomerates (e.g., Eaton, Honeywell) could erode market share. The recent CIRCOR acquisition may face regulatory scrutiny or integration challenges, as highlighted in the May 2026 news.
Worst-Case Scenario: A severe recession could slash revenue growth to negative, compress margins, and trigger multiple compression to the historical low P/E of 17.7x. Combined with integration failures from CIRCOR, earnings could drop 20-30%. In this scenario, the stock could fall to the 52-week low of $692.02, representing a -28% decline from the current price of $962.89. The maximum drawdown of -19.52% over the past year suggests such a decline is plausible but not the base case.
FAQ
The key risks are: 1) Cyclical downturn: Parker's revenue is tied to industrial and aerospace cycles; a recession could reduce demand and compress margins. 2) Integration risk: The CIRCOR acquisition may face execution challenges, delaying synergies and pressuring earnings. 3) Valuation risk: The premium P/E of 25.38x could compress if growth slows, leading to a 10-15% decline. 4) Macro sensitivity: With a beta of 1.11, the stock is more volatile than the market and could fall sharply in a broad sell-off. The most severe risk is a recession causing a -28% drop to the 52-week low of $692.
The 12-month forecast is positive, with a base case target of $1,000-$1,275 (50% probability) assuming steady growth and stable margins. The bull case (30% probability) sees the stock reaching $1,100-$1,334, driven by successful CIRCOR integration and margin expansion. The bear case (20% probability) targets $692-$900 if a recession hits or integration fails. The most likely scenario is the base case, where the stock trades near the analyst average target of $1,275, offering +32.4% upside. Key assumptions include revenue growth of 6-8% and net margin remaining above 17%.
Parker-Hannifin is fairly valued relative to its growth and profitability. The trailing P/E of 25.38x is a 15% premium to the industrial machinery industry average of 22x, but this premium is justified by a net margin of 17.9% (vs. 10% industry) and ROE of 25.8%. The PEG ratio of 1.04 suggests the stock is priced in line with its earnings growth rate. Historically, the P/E has ranged from 17.7x to 32.8x, so the current level is near the middle. The market is pricing in continued margin expansion and successful integration of CIRCOR. Overall, the stock is not overvalued but offers limited upside if growth disappoints.
Parker-Hannifin is a good buy for investors seeking a high-quality industrial company with strong growth and profitability. The stock offers a +32.4% upside to the implied analyst target of $1,275, supported by a PEG ratio of 1.04 and a net margin of 17.9% that far exceeds the industry average. However, the stock trades near its 52-week high, so there is limited short-term margin of safety. The biggest downside risk is a recession that could compress the P/E from 25.38x to 20x, implying a ~20% decline. For long-term investors with a 3-5 year horizon, the current price is reasonable; for short-term traders, waiting for a pullback to $850-900 may offer better entry.
Parker-Hannifin is better suited for long-term investment due to its stable growth, strong cash flows, and dividend yield of 0.96%. The beta of 1.11 indicates moderate volatility, making it less ideal for short-term trading. The company's consistent revenue growth and margin expansion provide a solid foundation for a 3-5 year holding period. Short-term traders may find opportunities around earnings or acquisition news, but the stock's premium valuation limits upside in the near term. A minimum holding period of 2-3 years is recommended to ride out cyclical fluctuations and benefit from compounding.
