Parker-Hannifin (PH): Has the Multiyear Run Left the Stock Overvalued or Still Undervalued?

Parker-Hannifin (PH) has been on a strong multiyear run, and the latest leg higher has investors asking whether the current valuation still makes sense or is starting to price in perfection.

See our latest analysis for Parker-Hannifin.

At around $874.49 per share, Parker-Hannifin’s strong year to date share price return is being reinforced by solid multi year total shareholder returns. This suggests momentum is still building rather than cooling off.

If Parker-Hannifin’s run has you rethinking industrial exposure, it might also be a good time to explore aerospace and defense stocks for other potential ideas in a similar space.

With shares near record highs and long term returns outpacing most industrial peers, is Parker-Hannifin still trading below its true potential, or has the market already priced in the next leg of growth?

Most Popular Narrative Narrative: 3.7% Undervalued

Compared with Parker Hannifin’s last close at $874.49, the most widely followed fair value estimate of $907.86 points to modest upside that rests on specific long term growth and margin assumptions.

The ongoing shift of the portfolio toward electrification, with the Curtis Instruments acquisition and strategic investments in electrified motion and control, increases Parker-Hannifin's exposure to fast-growing zero-emission equipment markets, likely supporting accelerated long-term top-line growth and margin accretion as these businesses scale.

Read the complete narrative.

Want to see what kind of revenue runway and profit profile could justify this richer multiple, and how buybacks amplify it, without eye watering growth assumptions? Read on.

Result: Fair Value of $907.86 (UNDERVALUED)

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

However, persistent weakness in core industrial demand or a setback integrating Curtis Instruments could compress margins and quickly challenge the current undervaluation narrative.

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

Another Take On Value

Our DCF model lands in a very different place, with a fair value of $667.46, implying Parker Hannifin is overvalued at current prices rather than modestly undervalued. If cash flows do not keep compounding as expected, today’s price may be reflecting too much optimism.

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 Parker-Hannifin 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 915 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 Parker-Hannifin Narrative

If this perspective does not quite match your own view, or you want to dig into the numbers yourself, you can build a custom narrative 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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