Gold prices climb, set for fourth straight month of gains on rate cut cheer
Investing.com - Morgan Stanley upgraded Donaldson Company (NYSE:DCI) from Underweight to Equalweight on Monday, raising its price target to $84.00 from $72.00. The stock is currently trading at $87.68, near its 52-week high of $88.88, with a market capitalization of $10.16 billion.
The upgrade reflects Morgan Stanley’s view that Donaldson’s exposure to artificial intelligence infrastructure, combined with strength in its Aftermarket business and a de-risked outlook for Life Sciences, creates a more balanced risk/reward profile for the stock. InvestingPro data shows DCI has delivered impressive returns, with a 31.8% gain year-to-date and nearly 30% over the past six months.
The firm highlighted Donaldson’s filters used in gas turbine air intake systems, noting that continued strength in data center and AI infrastructure development could support earnings. Morgan Stanley pointed out that while Power Generation (gas turbines) currently represents about 5% of sales, data center developers have turned to "behind the meter" power from smaller turbines and engines due to power shortfall from the grid.
Morgan Stanley estimates that 30% year-over-year growth in Power Generation could represent $50-60 million of incremental sales, though likely at margin-neutral levels given sophisticated end customers.
The firm also noted that its original thesis regarding downside risk to Donaldson’s Life Sciences business "has largely played out and likely hit a low water mark last quarter," while the company continues to see strength in Aftermarket within its Mobile Solutions segment.
In other recent news, Donaldson Company reported its Q4 2025 earnings, surpassing expectations with an adjusted earnings per share of $1.03, compared to the forecast of $1.02. The company’s revenue reached $981 million, exceeding the expected $951.57 million, highlighting strong financial performance. Stifel has raised its price target for Donaldson to $84 from $69, maintaining a Hold rating, reflecting confidence in the company’s recent performance. Additionally, Donaldson’s Board of Directors declared a regular cash dividend of 30 cents per share, marking the 70th consecutive year of quarterly cash dividend payments.
Shareholders at Donaldson’s annual meeting approved all proposals, including the election of new director Dan Shine and the ratification of PricewaterhouseCoopers as the independent public accountant. In other developments, Ginkgo Bioworks secured a $22.2 million contract from BARDA to enhance domestic production capabilities for monoclonal antibodies. These recent developments indicate ongoing strategic initiatives and financial stability within both companies.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.