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On Monday, Stifel analysts adjusted their outlook on Donaldson Company (NYSE:DCI) shares, reducing the price target to $63 from the previous $70 while maintaining a Hold rating on the stock. Currently trading at $63.41, the company has seen two analysts revise their earnings downward for the upcoming period, according to InvestingPro data. The revision reflects concerns over a potential industrial recession in the United States, anticipated to occur in the second half of 2025 through the first half of 2026.
The Stifel team indicated that the adjustment in the price target is based on the expectation that U.S. trade policy will lead to an industrial downturn. Despite these concerns, Donaldson maintains strong fundamentals with a P/E ratio of 20.39 and revenue growth of 4.46% in the last twelve months. This economic shift is expected to impact customer capital and operating expenditures negatively, prompting a more cautious approach to spending.
The analysts also noted that supply chain disruptions could lead to production slowdowns for Donaldson and its customers. Such disruptions are often a consequence of uncertain trade environments and can significantly affect manufacturing operations and logistics.
The maintained Hold rating suggests that Stifel analysts do not see significant upside or downside potential for Donaldson stock at this time. The new price target of $63 indicates a more conservative valuation of the company’s shares based on the anticipated economic conditions.
The forecasted industrial recession and its implications on capital expenditures and supply chains are expected to pose challenges for Donaldson Company, a global provider of filtration systems. The company will likely face headwinds as it navigates the uncertain trade policy landscape and its effects on the broader industrial sector. According to InvestingPro analysis, the stock appears slightly undervalued at current levels, with additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of this and 1,400+ other US stocks.
In other recent news, Donaldson Company reported its first-quarter 2025 earnings, revealing an adjusted earnings per share (EPS) of $0.83, slightly below the analysts’ forecast of $0.84. The company’s revenue reached $870 million, missing the expected $908.34 million. Despite the revenue shortfall, Donaldson’s operating margin improved to 15.2%, reflecting effective cost management. Looking ahead, the company maintains a cautiously optimistic outlook, forecasting full-year sales to be flat to up 4% and projecting an adjusted EPS range of $3.60 to $3.68.
In other developments, Ginkgo Bioworks secured a $29 million contract from ARPA-H to develop a new method for producing active pharmaceutical ingredients (APIs) using wheat germ cell-free systems. This initiative, known as the WHEAT program, aims to decentralize and stabilize the manufacturing of essential medicines in the United States. Ginkgo Bioworks will collaborate with several partners, including Tritica Biosciences and On Demand Pharmaceuticals, to advance this project. The program is part of ARPA-H’s efforts to improve the availability and accessibility of medical treatments in the U.S.
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