Stifel maintains Hold rating on Parker-Hannifin stock amid mixed distributor survey

Investing.com - Stifel has reiterated its Hold rating and $726.00 price target on Parker-Hannifin (NYSE:PH), a prominent machinery player with $19.85 billion in revenue and strong financial health according to InvestingPro data, following a survey of the company’s North American distributors.

The investment firm surveyed 33 domestic Parker-Hannifin distributors, representing approximately 11% of the company’s Diversified Industrial North America revenue, revealing mixed results compared to previous expectations. Based on InvestingPro analysis, the company currently appears overvalued, trading at elevated EBITDA and revenue multiples.

Survey findings showed first-quarter fiscal 2026 sales growth of 0.7%, lower than the 1.2% reported in the previous quarter’s survey, while inventory declined 0.5% versus the prior quarter’s 0.4% decrease, and pricing decelerated to 2.4% from 3.5%.

Despite current quarter softness, distributor expectations for the next 12 months improved, with anticipated sales growth of 3.7% (up from 2.7%) and inventory growth of 0.6% (up from 0.3%), though Stifel’s regression model predicts a 0.3% decline in North American organic revenue for the first quarter.

The survey highlighted increasing economic concerns, with 30% of distributors now expecting a recession in the next 12 months (up from 21% in the previous survey), while 58% identified tariffs as the greatest impact on demand, followed by local economy (21%), government regulation (12%), and other factors (9%).

In other recent news, Parker-Hannifin Corporation has completed the acquisition of Curtis Instruments for approximately $1 billion in cash. This strategic move is expected to enhance Parker’s capabilities in electric and hybrid vehicle technologies, with Curtis Instruments projecting sales of around $320 million by 2025. Additionally, Deutsche Bank has downgraded Parker-Hannifin’s stock rating from Buy to Hold, citing valuation concerns despite the stock’s consistent outperformance over the past four years. On a positive note, Parker-Hannifin’s Board of Directors declared a regular quarterly cash dividend of $1.80 per share, marking the company’s 301st consecutive quarterly dividend payment.

Furthermore, Goldman Sachs raised its price target for Parker-Hannifin to $804, maintaining a Buy rating due to the company’s strong quarterly results, which surpassed consensus estimates. KeyBanc also increased its price target to $810, highlighting Parker-Hannifin’s strong execution and effective capitalization on aerospace tailwinds. These recent developments underscore Parker-Hannifin’s strategic growth initiatives and its robust financial performance in a challenging industrial environment.

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