Update shared on 25 Nov 2025
Fair value Increased 4.50%Analysts have increased their price target for Donaldson Company from $80.00 to $83.60. They cite stronger aftermarket demand and anticipated benefits from ongoing AI infrastructure investments as key factors supporting the upward revision.
Analyst Commentary
Bullish Takeaways- Stronger aftermarket demand, particularly in the Mobile Solutions segment, is signaling robust end-user activity and supporting upward revisions to valuation.
- Continued strength in data center and AI infrastructure investment is viewed as a catalyst for sustained earnings growth, as Donaldson's filters are widely used in gas turbine air intake systems.
- Bullish analysts note that upside from AI-driven infrastructure spending has helped rebalance the risk and reward profile for the stock.
- Recent proprietary surveys in aftermarket channels reflect broadly healthy demand trends, adding confidence in execution and future revenue streams.
- Despite improved demand outlook, some analysts maintain a more cautious stance and keep Hold ratings given current valuation levels.
- Uncertainty remains over the pace of growth in the Life Sciences segment as recent risks have largely played out, but further upside appears limited.
- The potential for market normalization in AI-related spending could limit outperformance once the build-out cycle matures.
What's in the News
- Donaldson Company provided earnings guidance for fiscal year 2026, projecting EPS between $3.92 and $4.08, compared with GAAP EPS of $3.05 in fiscal 2024. Sales are expected to increase by 1% to 5%, reaching approximately $3.8 billion at the midpoint. This includes a 1% benefit from pricing. (Key Developments)
- Between May 1, 2025 and July 31, 2025, the company repurchased 860,973 shares for $59.35 million. The total buyback under the program announced in November 2023 now stands at 6,129,325 shares repurchased, representing 5.13% of shares for $420.19 million. (Key Developments)
Valuation Changes
- Consensus Analyst Price Target has increased from $80 to $83.60, reflecting a moderate upward revision.
- Discount Rate has risen slightly from 8.08% to 8.42%, indicating a slightly higher risk assessment in the valuation models.
- Revenue Growth assumption remains largely unchanged, edging up from 3.92% to 3.93%.
- Net Profit Margin projection has declined marginally, from 12.90% to 12.88%.
- Future P/E multiple has increased from 20.22x to 20.97x, suggesting higher market expectations for future earnings.
Disclaimer
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