Donaldson Company (DCI): Evaluating Valuation After Recent Share Price Outperformance

Donaldson Company (DCI) stock continues to attract attention as investors review its performance over the past quarter. Shares have gained roughly 18% over the past 3 months, a figure that stands out among its industry peers.

See our latest analysis for Donaldson Company.

While Donaldson Company’s share price now sits at $84.25, the stock’s strong 17.6% gain over the past quarter continues a pattern of robust performance, signaling that momentum is building. Factoring in both price and dividends, the total shareholder return over the past year reached nearly 16%. This is a solid performance that reflects investor confidence in the company’s outlook and fundamentals.

If Donaldson’s steady climb has you considering broader opportunities, now’s a great time to discover fast growing stocks with high insider ownership

But with shares now trading just above analyst price targets and a strong run behind it, investors must ask if Donaldson remains undervalued or if the market has already factored future growth into the current price.

Most Popular Narrative: 5% Overvalued

Donaldson Company’s most mainstream valuation narrative suggests the current share price sits just above the consensus fair value, despite strong performance. This perspective brings up ambitious financial targets and the impact of recent strategic moves.

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

Read the complete narrative.

What fresh forecasts drive this high price tag? The most followed narrative banks on future profit margins and declining share counts, but the specifics may surprise you. Could bold projections about next-gen filtration and recurring revenue be the real story behind the price? Only in the full narrative.

Result: Fair Value of $80 (OVERVALUED)

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

However, persistent delays in high-margin segments and global market headwinds could hinder Donaldson’s expected growth. This could cast some doubt on these ambitious projections.

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

Another View: DCF Model Suggests Undervaluation

While the consensus narrative finds Donaldson Company overvalued by around 5%, our DCF model reaches a different conclusion. The SWS DCF model estimates fair value at $87.67, which is about 4% higher than the current share price. Could the market still be underestimating future cash flows?

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 840 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 find yourself questioning these conclusions or simply want to dive deeper on your own, it's quick and easy to craft your own perspective. Do it your way

A good starting point is our analysis highlighting 2 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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