Donaldson Company (DCI): Assessing Valuation After Upbeat Earnings and Raised 2026 Outlook

If you are holding shares of Donaldson Company (DCI) or thinking about buying in, this latest earnings report may have you sitting up and paying a little closer attention. Donaldson just delivered fourth-quarter results that topped expectations on both revenue and earnings per share, notching year-over-year growth in each. Additionally, management raised the bar for fiscal 2026 by issuing upbeat guidance that points to higher adjusted EPS and more sales growth ahead. For investors wondering if there is new momentum building, these numbers are certainly a positive jolt.

This fresh performance boost fits into a larger pattern. Donaldson’s shares have returned 12% for investors in the past year, with gains accelerating to 17% over the past three months. The company’s strong execution in expanding sales and net income has been complemented by strategic moves into high-margin bioprocessing and ongoing investments in its industrial solutions. Despite facing some supply chain and inflation pressures, Donaldson’s steady pace of growth continues to attract market attention.

But after this recent uptick, is Donaldson Company now trading at a bargain, or is the optimistic outlook already reflected in the share price?

Most Popular Narrative: Fairly Valued

The most widely followed narrative views Donaldson Company as fairly valued, with the current share price closely tracking the average analyst expectation.

Global expansion of environmental regulations and emissions standards is increasing demand for advanced filtration across industrial and transportation sectors. This is positioning Donaldson to achieve record sales in both Industrial Solutions and Mobile Solutions, resulting in a direct positive impact on revenue and earnings growth in FY26 and beyond.

Want a peek behind Donaldson’s valuation? Analysts are betting on bold profit expansion, margin upgrades, and a financial trajectory that hinges on tightening regulations worldwide. What are the exact numbers powering their target and how far could the growth story go? The full narrative holds the pivotal assumptions and surprise calculations driving this fair value call.

Result: Fair Value of $80 (ABOUT RIGHT)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain, including sluggish bioprocessing adoption and an overreliance on aftermarket parts sales. Both of these factors could limit revenue and margin gains ahead.

Find out about the key risks to this Donaldson Company narrative.

Another View: Discounted Cash Flow Model

Taking a different approach, our SWS DCF model suggests that Donaldson Company could be trading below its intrinsic value. This may present a potential opportunity for value seekers. But can this perspective stand up to the more cautious consensus view?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Donaldson Company for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Donaldson Company Narrative

If you want to dig into the numbers and shape your own outlook on Donaldson Company, you can explore the data and build your own narrative in just a few minutes. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Donaldson Company.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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