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Cleveland, Ohio-based Parker-Hannifin Corporation (PH) manufactures and sells motion and control technologies and systems. Valued at $82.4 billion by market cap, PH is a leading diversified industrial manufacturer that offers motion-control and fluid systems and industrial components, flight control, hydraulic, fluid conveyance, thermal management, pneumatic, and lubrication systems, and components for aerospace markets.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and PH perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the specialty industrial machinery industry. PH's global presence, with 40% of its business outside the U.S. and a network of 17,100 independent distributors, helps mitigate regional market risks and diversifies revenue streams. Its international operations provide access to emerging markets for potential growth, while strategic management of foreign currency risks through derivatives enhances its global operations.
Despite its notable strength, PH slipped 12.2% from its 52-week high of $718.44, achieved on Jan. 31. Over the past three months, PH stock declined 9.4%, underperforming the Dow Jones Industrials Average’s ($DOWI) 4.6% losses during the same time frame.
In the longer term, shares of PH dipped marginally on a YTD basis, underperforming DOWI’s YTD marginal gains. However, the stock climbed 18.8% over the past 52 weeks, outperforming DOWI’s 10.1% returns over the last year.
To confirm the bullish trend, PH has been trading above its 200-day moving average over the past year. However, the stock is trading below its 50-day moving average since late February, with slight fluctuations.
The outstanding performance of Parker-Hannifin was fueled by strong growth in its diversified portfolio, leading to consistent sales growth. Additionally, high demand for aftermarket products in commercial and defense sectors played a key role in driving the company's top-line expansion.
On Jan. 30, PH shares closed up more than 5% after reporting its Q2 results. Its adjusted EPS of $6.53 surpassed Wall Street expectations of $6.22. The company’s revenue was $4.7 billion, missing Wall Street forecasts of $4.8 billion. PH expects its full-year adjusted EPS to be between $26.40 and $27.
PH’s rival, Xylem Inc. (XYL) shares lagged behind the stock, with a 2.1% gain over the past 52 weeks but outpaced the stock with an 11.2% uptick on a YTD basis.
Wall Street analysts are bullish on PH’s prospects. The stock has a consensus “Strong Buy” rating from the 19 analysts covering it, and the mean price target of $769.79 suggests a potential upside of 22% from current price levels.
