Parker-Hannifin Maintains Buy Rating at DB
Friday, June 17, 2021 2:30 PM

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Analysts at Deutsche Bank maintained Buy rating on the shares of Parker Hannifin Corp. (NYSE: PH) as it reiterated its 10 percent per annum revenue growth target, with 5 percent from organic growth. They set a price target $103 for the stock.

DB analysts state that after multiple years of cost restructuring, the company believes it has increased the floor and ceiling of its operating margin curve to 12 to 13 percent and 16 to 17 percent, respectively. The company maintained its guidance for a 15 percent level of margin throughout the cycle. The company’s management that product pipeline remains robust with $2.4 billion incremental sales potential. COO Tom Williams highlights 5 products including hybrid EHA systems for utility vehicles, sterile water filtration system, compact spiral hydraulic hose, high temperature hose and hydrostatic transmission, that are in late development stage and expected to tally $1 billion incremental revenues over the next five year. The company continues to see potential for Winovation breakthroughs to add 2 ppts to organic growth over the cycle. The company’s management expects that order competition gets tougher during the June quarter and they reiterated the firm’s incremental margin rates to moderate into the 20 to 30 percent range as capacity constraints emerge over the next couple of years.

On a year-to-date basis, PH’s share performance is -0.54 percent, and as compared to Standard & Poor’s 500, its YTD share performance is -1.59 percent.

Parker-Hannifin is the global leader in motion and control technologies, engineering innovative products and systems to increase their customers’ productivity. It has a market capitalization of $13.92 billion, and P/E ratio of 14.450. It has 162 million outstanding shares.

Shares of Parker-Hannifin lost 0.71 percent or 61 cents to trade at $85.54 in the last hour.

 

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