A Look At Donaldson Company (DCI) Valuation After Record Q2 Results And The Facet Acquisition

Donaldson Company (DCI) is in focus after its fiscal Q2 2026 earnings call highlighted record sales across all three business segments and an updated outlook that management described as confident.

See our latest analysis for Donaldson Company.

At a share price of $85.54, Donaldson’s recent Q2 update and the Facet acquisition come after a mixed stretch, with a 7 day share price return of 3.6% versus a 30 day share price decline of 3.6%, while the 1 year total shareholder return of 45.0% points to momentum that has been building over a longer horizon.

If this kind of long term compounding interests you, it could be a good time to widen your search and check out 20 top founder-led companies

With the shares at $85.54, an intrinsic discount of about 9% and a 1 year total return of 45%, the key question is simple: is Donaldson still mispriced, or is the market already paying up for future growth?

Most Popular Narrative: 12.9% Undervalued

At $85.54, the most followed narrative on Donaldson pegs fair value at $98.20, suggesting the current price sits below those modeled cash flows and margins.

Ongoing replacement parts/service model and the rising installed base are improving revenue predictability and resilience, increasing aftermarket sales mix (now over 50% of certain businesses), which supports stable cash flow and long-term earnings durability.

Read the complete narrative.

Want to see what sits behind that fair value call? The narrative leans heavily on steady revenue compounding, fatter margins, and a richer earnings multiple than today.

Result: Fair Value of $98.20 (UNDERVALUED)

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

However, this depends on Life Sciences and bioprocessing improving as expected, and on end markets like China and Latin America not softening more than analysts model.

Find out about the key risks to this Donaldson Company narrative.

Another View on Valuation

While the most followed narrative sees Donaldson as 12.9% undervalued, the current P/E of 26.2x tells a tighter story. It broadly matches the US Machinery average of 26.2x, yet sits above a fair ratio of 22.7x. This implies there may be less room for error if expectations cool.

For a closer look at what the numbers imply, including how this gap might affect future valuation risk, see the See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

The article so far leans optimistic, but the decision is yours. Move quickly, review the key drivers, and weigh up the company's 2 key rewards.

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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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