Parker Hannifin Beats Q3 Earnings Estimate, Eyes Long-Term Margin and Earnings Growth

Argus Research's John Eade raised their price target on Parker Hannifin (NYSE: PH) by 7.3% from $550 to $590 on 2024/05/06. The analyst maintained their Strong Buy rating on the stock.

In a research note, Eade expressed optimism about Parker Hannifin's future prospects, stating that the company is on track to achieve its long-term goals of raising margins and growing earnings. Eade noted that although the company faced challenges due to the coronavirus, supply-chain issues, and high inflation, it has successfully realigned expenses in response to lower demand. As orders pick up, margins are once again widening.

Parker Hannifin recently reported its third-quarter 2024 earnings, which delivered a beat. The company reported earnings per share (EPS) of $6.51, surpassing the Zacks Consensus Estimate of $6.10 and showing a 9.8% increase compared to Q3 2023. However, the company's revenue of $5.07 billion missed the Zacks Consensus Estimate by a small margin and was slightly lower than the previous year's Q3 revenue of $5.06 billion. Despite this, the segment operating margin increased by 50 basis points year-over-year to 24.7%.

Looking ahead, Parker Hannifin's management provided guidance for the full fiscal year 2024. They expect adjusted EPS in the range of $24.65 to $24.85 and anticipate revenue growth of 4%. The company also aims to achieve a total segment operating margin of 24.6%. Chairman & CEO Jenny Parmentier expressed satisfaction with the company's record results for the quarter and highlighted the strength of their transformed portfolio and operational improvements.

Analyst sentiment towards Parker Hannifin remains predominantly positive. According to data from WallStreetZen, 83.3% of top-rated analysts currently rate the stock as a Strong Buy or Buy, with 16.7% considering it a Hold. No analysts recommend or strongly recommend selling the stock. The consensus forecast among analysts is that Parker Hannifin's next yearly EPS will be $21.07, representing a 2.2% decrease compared to the previous year.

Since the release of Parker Hannifin's latest quarterly report, the stock price has seen a 3.8% increase. Year-over-year, the stock has surged by an impressive 64.5%, outpacing the broader S&P 500, which has grown by 25.2% during the same period.

Parker Hannifin Corporation, headquartered in Cleveland, OH, is a leading manufacturer of motion and control technologies and systems for various markets, including mobile, industrial, and aerospace. The company's Diversified Industrial Segment produces motion-control and fluid power system components for a wide range of vehicles and equipment. The Aerospace Systems Segment focuses on hydraulic, fuel, pneumatic, and electro-mechanical systems and components used in commercial, military, and general aviation aircraft.

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