Parker-Hannifin (PH): Assessing Valuation After Earnings Beat and Strength in Aerospace, Defense and Industrial Demand

Parker-Hannifin (PH) jumped 8% on November 6 after delivering quarterly results that topped Wall Street’s earnings and revenue forecasts, powered by aerospace and defense strength and a rebound in North American industrial demand.

See our latest analysis for Parker-Hannifin.

That post earnings jump comes on top of a robust 12.6% 1 month share price return and a 38.1% year to date share price gain, while the 3 year total shareholder return of 208.6% underlines that momentum has been building for some time.

If Parker Hannifin’s aerospace and defense momentum has caught your eye, it might be worth exploring other aerospace and defense stocks that could be benefiting from similar forces.

After such a powerful multi year run, with analysts still seeing modest upside to an already lofty share price, investors now face a key question: Is Parker Hannifin still undervalued, or is future growth fully priced in?

Most Popular Narrative Narrative: 3.5% Undervalued

With Parker Hannifin last closing at $869.20 against a narrative fair value of $900.42, the story leans modestly positive on upside potential.

The company's enhanced exposure to aftermarket and longer-cycle revenue streams (anticipated to be 85% of the portfolio by 2029) creates higher quality, more recurring income and reduced cyclicality, which should underpin long-term earnings growth and provide earnings stability during future cycles.

Read the complete narrative.

Want to see why steady growth assumptions still support a premium valuation multiple usually reserved for market darlings? The narrative hinges on surprisingly ambitious earnings power and a richer future profit multiple than you might expect. Curious how those pieces fit together into that fair value calculation?

Result: Fair Value of $900.42 (UNDERVALUED)

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

However, softer industrial demand or a setback integrating electrification acquisitions could quickly challenge the upbeat earnings and premium valuation narrative.

Find out about the key risks to this Parker-Hannifin narrative.

Another Lens on Valuation

While the narrative fair value suggests Parker Hannifin is about 3.5% undervalued, our SWS DCF model paints a tougher picture, with fair value closer to $664.72, implying the shares are meaningfully overvalued. Which story you trust depends on how confident you are in those long term growth and margin assumptions.

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

Build Your Own Parker-Hannifin Narrative

If you see the story differently or simply prefer to dig into the numbers yourself, you can craft a fresh view in just a few minutes: Do it your way

A great starting point for your Parker-Hannifin research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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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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