Latest news with #Parker-Hannifin
Yahoo
5 days ago
- Business
- Yahoo
Morgan Stanley starts Parker-Hannifin at Equal-weight rating
-- Morgan Stanley initiated coverage of Parker-Hannifin Corp (NYSE:PH) with an Equal-weight rating and a $700 price target, saying the industrial firm's transformation is already priced in after a 30% re-rating over the past two years. The brokerage said Parker-Hannifin has become a more 'resilient', secular growth business after expanding into longer-cycle industrial markets and doubling its aerospace exposure through acquisitions. However, it warned that meeting mid-single-digit growth targets for its core industrial business through fiscal 2026 and 2027 could be challenging. Organic growth has largely underwhelmed, with industrial softness offsetting aerospace strength, according to analysts at Morgan Stanley. Since fiscal 2018, Parker-Hannifin has posted only a 3% organic growth CAGR but tripled operating profit due to strong margin expansion and dealmaking, it noted. Margins remain a bright spot, with the company resetting its base nearly 1,000 basis points higher since 2018. Still, the firm said further upside may be limited and investor focus could shift to whether Parker-Hannifin can deliver large-scale M&A gains similar to the successful Meggitt (LON:MGGT) deal. Morgan Stanley added that Parker-Hannifin is well-positioned to navigate tariffs, thanks to its strong U.S. manufacturing exposure and pricing power. But with the margin lever harder to pull, the firm sees the equity as fairly valued for now. The $700 target is based on 23 times forward earnings, a 10% premium to the S&P 500 to reflect the company's improved portfolio. Related articles Morgan Stanley starts Parker-Hannifin at Equal-weight rating Circle IPO surges 123% on debut Tesla stock tumbles amid Trump criticism
Yahoo
5 days ago
- Business
- Yahoo
HSBC upgrades Dr Reddy's on weight loss drug semaglutide-driven earnings rebound
-- HSBC upgraded Dr Reddy's Laboratories to Buy from Hold and raised its target price to INR 1445, citing expectations that sales of semaglutide, a generic version of Novo Nordisk's blockbuster weight-loss and diabetes drug, will help drive a recovery in earnings growth from fiscal new target for the U.S.-listed ADR is $16.90, up from $14.44. The brokerage forecasts Dr Reddy's semaglutide revenues at $280 million in 2027, contributing about 18% of the company's earnings per share, with the bulk of those sales expected to come from the Canadian market. In a bullish case, HSBC sees potential sales reaching $500 million. Dr Reddy is preparing for a post-gRevlimid era. The company is expected to lose a major chunk of its earnings from generic Revlimid after January 2026, with investors concerns about what will fuel growth after that. HSBC said semaglutide, along with other efforts in consumer health and biologics, offers a promising path forward. While a court order in India has restricted semaglutide exports until the original brand's local patent expires in March 2026, HSBC believes Dr Reddy's will be among the first to launch in markets such as Canada, Brazil, and India shortly thereafter. The note highlighted tight supply and strong demand for semaglutide in these markets, which could limit price erosion, a typical challenge for generic drugs. HSBC now assumes an early FY27 launch across key geographies instead of only Canada in late FY26. The firm cut FY26 EPS estimates by 5.1% due to declining Revlimid sales but raised FY27 and FY28 forecasts by 12–13% on semaglutide-led growth. Related articles HSBC upgrades Dr Reddy's on weight loss drug semaglutide-driven earnings rebound Morgan Stanley starts Parker-Hannifin at Equal-weight rating Huawei struggles to break Nvidia's AI chip grip in China, says The Information Sign in to access your portfolio
Yahoo
5 days ago
- Business
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Mizuho upgrades Visa as it sees decade-long growth from cash-to-card shift
-- Mizuho upgraded Visa Inc (NYSE:V) to Outperform from Neutral and raised its price target to $425 from $359, saying the shift from cash to cards in the U.S. still has a long runway and could support another decade of domestic growth. The brokerage estimates true U.S. card penetration is about 75%, lower than the widely assumed 80-90%, suggesting there is still significant room for Visa to expand volumes. 'This leaves room for another decade of solid top-line growth domestically,' analysts at Mizuho said in a note. Visa's growth has lagged behind U.S. personal consumption expenditures (PCE) post-COVID, raising concerns that card usage had peaked. But Mizuho attributes that trend largely to a temporary shift in spending toward lower card-penetration categories like fuel and utilities, which it believes is now reversing. Mizuho also pointed to Visa's performance in high-penetration markets such as Canada and the Nordics, where the company continues to outpace PCE growth. These regions serve as case studies that growth can continue even when most of the population already uses cards. The firm raised its FY26 and FY27 estimates slightly on stronger volume expectations and lifted its valuation multiple to 31 times forward earnings, up from 28x, to reflect renewed optimism about Visa's domestic growth prospects. Visa shares are trading marginally up $369. Mizuho's new target price implies upside of about 15%. Related articles Mizuho upgrades Visa as it sees decade-long growth from cash-to-card shift Morgan Stanley starts Parker-Hannifin at Equal-weight rating Huawei struggles to break Nvidia's AI chip grip in China, says The Information Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
22-05-2025
- Business
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2 Ultra-Safe Dividend Growth Stocks to Buy and Hold Forever
Dividend growth stocks are proven wealth creators. These two blue chip dividend growth stocks also double as top safe havens. 10 stocks we like better than Procter & Gamble › While tech giants dominate the headlines, dividend stocks have quietly driven a substantial share of long-term market returns. Their strength lies in compounding -- a force Albert Einstein famously dubbed "the eighth wonder of the world." When dividends are reinvested over decades, even modest yields can snowball into remarkable wealth as gains build upon gains. In today's backdrop of persistent inflation and economic uncertainty, dividend growth stocks offer more than upside -- they deliver resilience. Companies with long histories of raising dividends often have stronger balance sheets, durable business models, and greater pricing power than non-dividend payers. These traits help reduce volatility during market downturns, when consistent cash flows matter most. Two companies exemplify the best of this category. Procter & Gamble (NYSE: PG) has raised its dividend for 69 consecutive years, backed by a recession-resistant portfolio of household brands. Meanwhile, Parker-Hannifin (NYSE: PH), a diversified industrial leader, also sports a 69-year dividend growth streak while capitalizing on long-term trends in automation, aerospace, and clean energy. Read on to find out more about these two top dividend growth stocks. Procter & Gamble (NYSE: PG) remains a cornerstone in the consumer goods sector, sporting a diverse portfolio of iconic brands across beauty, healthcare, fabric care, and baby products. The stock currently offers a dividend yield of approximately 2.55%, which is nearly double the S&P 500 (SNPINDEX: ^GSPC) average of 1.27%. The company's dividend payout ratio stands at around 64%, indicating a balanced approach between rewarding shareholders and reinvesting in future growth. Notably, P&G has achieved 69 consecutive years of dividend increases, underscoring its commitment to delivering consistent returns to shareholders. From a valuation standpoint, P&G's forward price-to-earnings (P/E) ratio is approximately 23.6, slightly above the S&P 500's forward P/E of 21.4. This premium reflects the company's robust brand equity and defensive business model. Despite recent challenges, including softened sales growth and market pressures in China, P&G continues to invest in product innovation and marketing, allocating about 13% of its sales to these areas to maintain brand relevance. Looking ahead, P&G anticipates additional costs ranging from $1 billion to $1.5 billion in fiscal 2026 due to tariffs, representing approximately 3% of its cost of goods sold. To mitigate these impacts, the company is streamlining its stock-keeping units (SKUs), aiming to enhance operational efficiency and improve the consumer experience. With its unparalleled brand portfolio, strategic investments in innovation, and disciplined capital allocation, P&G stock offers an attractive blend of reliability, modest growth, and resilience, making it a compelling choice for income-focused portfolios. Parker-Hannifin (NYSE: PH) has solidified its position as an exceptional dividend compounder within the industrial sector, sporting an impressive 69-year streak of consecutive annual dividend increases. While its current 1.06% yield might appear modest, the company's conservative 25.3% payout ratio provides substantial room for continued distribution growth. This disciplined approach to shareholder returns has enabled Parker-Hannifin to deliver a remarkable 10.9% annualized dividend growth rate over the past 10 years -- more than double the rate of many blue chip dividend payers. The company's recent performance highlights its aerospace-driven growth strategy, with this segment delivering standout 11.7% organic growth and record 28.7% operating margins on an adjusted basis in fiscal Q3 2025. While Parker-Hannifin's diversified industrial segments have faced recent headwinds, with North American and international operations experiencing organic sales declines of 3.5% and 2.8% in the most recent quarter, respectively, the company has maintained exceptional operational efficiency, with record adjusted operating margins above 25% across both regions. This resilience during industrial softness demonstrates the effectiveness of Parker's "Win Strategy,™" focused on lean operations, product simplification, and supply chain optimization. Looking ahead, Parker-Hannifin is exceptionally positioned to benefit from structural growth in commercial aerospace, where robust aftermarket demand provides recurring revenue streams and pricing power. The company's strategic focus on high-margin fluid power and motion control systems places it at the center of automation, electrification, and aerospace trends, with decades of runway ahead. For income-focused investors, Parker-Hannifin stock offers a compelling combination of defensive industrial characteristics, aerospace growth exposure, double-digit dividend growth potential, and a management team with proven capital allocation expertise, making it an ideal cornerstone for building long-term wealth. Before you buy stock in Procter & Gamble, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Procter & Gamble wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor's total average return is 975% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 George Budwell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 2 Ultra-Safe Dividend Growth Stocks to Buy and Hold Forever was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
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PH Q1 Earnings Call: Margin Expansion and Aerospace Strength Offset Industrial Weakness
Industrial machinery company Parker-Hannifin (NYSE:PH) met Wall Street's revenue expectations in Q1 CY2025, but sales fell by 2.2% year on year to $4.96 billion. Its non-GAAP profit of $6.94 per share was 3.2% above analysts' consensus estimates. Is now the time to buy PH? Find out in our full research report (it's free). Revenue: $4.96 billion vs analyst estimates of $4.98 billion (2.2% year-on-year decline, in line) Adjusted EPS: $6.94 vs analyst estimates of $6.72 (3.2% beat) Adjusted EBITDA: $1.29 billion vs analyst estimates of $1.29 billion (26% margin, in line) Management slightly raised its full-year Adjusted EPS guidance to $26.70 at the midpoint Operating Margin: 21.1%, up from 19.3% in the same quarter last year Free Cash Flow Margin: 10.9%, down from 14.1% in the same quarter last year Organic Revenue was flat year on year, in line with the same quarter last year Market Capitalization: $86.23 billion Parker-Hannifin's first quarter results were marked by flat organic sales and a year-on-year revenue decline, but management pointed to continued margin expansion as a key driver of performance. CEO Jennifer Parmentier attributed the strong profitability primarily to disciplined cost controls, operational improvements, and the company's focus on higher-margin businesses, particularly in Aerospace, which saw robust aftermarket demand and backlog growth. Parmentier also highlighted the impact of recent divestitures and ongoing softness in transportation and industrial end markets as weighing on top-line results. Looking ahead, management slightly raised its full-year adjusted EPS guidance, citing confidence in mitigating tariff-related cost pressures and continued strength in long-cycle order intake. Parmentier emphasized, 'We expect to fully offset announced tariffs through a mix of pricing, supply chain actions, and ongoing cost reductions,' and pointed to the company's backlog and positive order momentum as reasons to expect improved industrial growth next year. However, management remained cautious about the timing of recovery in certain end markets, noting ongoing delays in industrial project activity. Parker-Hannifin's leadership focused on the resilience of its business model, margin expansion through operational improvements, and the outsized contribution from aerospace, while acknowledging persistent headwinds in industrial segments. Aerospace Aftermarket Drives Margins: The company's Aerospace segment delivered double-digit organic growth, fueled by strong aftermarket demand in both defense and commercial markets. Parmentier noted a record $7.3 billion backlog and emphasized that aftermarket now comprises about 50% of segment sales, supporting margin expansion. Operational Improvements and Cost Controls: Management credited its 'Win Strategy' business system and decentralized structure for enabling continuous cost reductions and efficiency gains, even as volumes in industrial businesses remain pressured. CFO Todd Leombruno highlighted the company's ability to grow adjusted EPS by 7% despite a 2% revenue decline. Order Growth and Backlog Visibility: Total company orders grew by 9%, with particularly strong momentum in international and long-cycle businesses. Parmentier cited improved distribution sentiment in North America and a third consecutive quarter of positive order growth internationally, signaling potential for future revenue conversion. Tariff Mitigation Actions: Announced tariffs, representing roughly 3% of cost of goods sold, are being fully offset through a combination of pricing actions, supply chain adjustments, and further operational efficiencies. Management stated these measures are already in place and factored into full-year guidance. M&A Pipeline Remains Active: While no major acquisitions were completed during the quarter, management described its M&A pipeline as robust, with opportunities of various sizes under evaluation. The company's recent share repurchases were characterized as capital allocation while awaiting strategic deals. Management's outlook for the rest of the year centers on continued margin resilience, strong aerospace demand, and the company's ability to navigate tariffs and industrial market uncertainty. Aerospace Momentum: Ongoing strength in aftermarket and commercial aerospace is expected to support margin expansion and offset slower industrial segments, with management raising organic growth targets for this business. Industrial Recovery Uncertainty: While order growth suggests a potential upturn, management acknowledged that the timing of an industrial recovery remains unclear, as project delays persist and customer sentiment is cautious. Tariff and Cost Management: The company's ability to fully mitigate tariff-related costs through pricing, supply chain flexibility, and operational discipline is seen as critical to maintaining profitability and supporting raised earnings guidance. Mig Dobre (Baird): Asked about the timing for conversion of long-cycle orders to revenues and expectations for industrial growth in the next year. Management indicated visibility for positive growth in industrial segments next year, citing strong order intake and minimal cancellations. Jamie Cook (Truist Securities): Questioned whether current aerospace margins are sustainable or driven by aftermarket mix, and if margin targets were conservative. Parmentier explained that strong aftermarket is structural due to acquisitions, and margin expansion is expected to continue even as OEM business recovers. Julian Mitchell (Barclays): Probed the divergence between rising orders and flat sales in industrials, asking about backlog trends. Management clarified that longer-cycle business has extended the link between orders and shipments, with industrial backlog up 5% sequentially. David Raso (Evercore ISI): Sought clarity on the annualized impact of tariffs and whether the run rate would change in the coming quarters. CFO Leombruno confirmed the 3% of cost of goods number is the current run rate, with no ramp or additional actions planned. Stephen Volkmann (Jefferies): Asked if Parker-Hannifin's local-for-local supply chain model could drive market share gains amid trade disruptions. Management acknowledged potential opportunities for share gains as customers seek more resilient supply partners. In upcoming quarters, the StockStory team will focus on (1) conversion of long-cycle orders to revenue, particularly in the industrial segment, (2) the sustainability of aerospace aftermarket demand and its contribution to margins, and (3) the effectiveness of tariff mitigation strategies on earnings. Progress in industrial project activity and visible wins in share gains due to supply chain strength will also be important markers to track. Parker-Hannifin currently trades at a forward P/E ratio of 23.8×. In the wake of earnings, is it a buy or sell? The answer lies in our free research report. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
