Parker Hannifin Corporation (PH, Financial) has announced an increase in its quarterly cash dividend to $1.80 per share. This adjustment signifies a 10% rise from the prior quarterly dividend of $1.63 per share.
Shareholders who are listed as of May 9 will be eligible to receive this enhanced dividend, which is scheduled for payment on June 6. This marks a continued commitment by Parker Hannifin to deliver greater returns to its investors.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for Parker Hannifin Corp (PH, Financial) is $701.92 with a high estimate of $824.00 and a low estimate of $564.00. The average target implies an upside of 17.61% from the current price of $596.81. More detailed estimate data can be found on the Parker Hannifin Corp (PH) Forecast page.
Based on the consensus recommendation from 23 brokerage firms, Parker Hannifin Corp's (PH, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Parker Hannifin Corp (PH, Financial) in one year is $433.25, suggesting a downside of 27.41% from the current price of $596.81. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Parker Hannifin Corp (PH) Summary page.
PH Key Business Developments
Release Date: January 30, 2025
- Revenue: Sales down 1.6% versus prior year, impacted by divestitures (1.4% unfavorable) and currency (0.9% unfavorable).
- Organic Growth: Positive at almost 1% for the quarter.
- Adjusted Segment Operating Margin: Record 25.6%, an increase of 110 basis points versus prior year.
- Adjusted EBITDA Margin: Record 26.8%, also an increase of 110 basis points from prior year.
- Adjusted Net Income: $853 million, or 18% return on sales.
- Adjusted Earnings Per Share (EPS): Up 6% to a Q2 record of $6.53.
- Debt Reduction: Reduced by $1.1 billion in the quarter, $1.5 billion year-to-date.
- Cash Flow from Operations: Record year-to-date cash flow from operations at 17.4% of sales, totaling $1.7 billion.
- Free Cash Flow: Increased 17% from prior year, totaling $1.5 billion or 15.2% of sales.
- Aerospace Sales: Record $1.5 billion, up 14% year-over-year, with 14% organic growth.
- Industrial North America Sales: $1.9 billion, with organic growth of negative 5%.
- Industrial International Sales: $1.3 billion, with organic growth of negative 3%.
- Order Rates: Increased 5% for the quarter, with Aerospace orders up 9%.
- Guidance: Full-year organic growth forecast at approximately 2%, with adjusted EPS midpoint at $26.70.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Parker Hannifin Corp (PH, Financial) achieved a record second-quarter adjusted segment operating margin of 25.6%, driven by the consistent execution of the Win Strategy.
- The company reported record earnings per share and year-to-date cash flow from operations, which allowed for a substantial debt reduction of $1.1 billion.
- Aerospace orders showed continued strength, with a 14% increase in sales driven by a 20% growth in the aftermarket sector.
- The company raised its Aerospace and Defense sales forecast to 11% for FY25, reflecting strong aftermarket performance and gradual OEM rate increases.
- Parker Hannifin Corp (PH) demonstrated strong margin expansion across all business segments, with a Q2 record adjusted EBITDA margin of 26.8%.
Negative Points
- Overall sales were down 1.6% compared to the previous year, primarily due to divestitures and unfavorable currency impacts.
- The industrial sector faced continued pressure, with North America experiencing a negative 5% organic growth and international markets seeing a negative 3% growth.
- The expected industrial recovery has been delayed, with ongoing challenges in transportation and off-highway markets.
- Currency headwinds are expected to be a 1% negative impact for the full year, adding to the challenges faced by the company.
- The off-highway sector is projected to decline in the mid-teens due to OEM destocking and production cuts, with continued weakness in the agricultural market.
