Donaldson Company, Inc. (DCI - Free Report) specializes in manufacturing and selling filtration systems and replacement parts worldwide. Its impressive financial performance and solid growth opportunities support upward revision in the company’s earnings estimates.
The Bloomington, MN-based company presently carries a Zacks Rank #2 (Buy). The stock belongs to the Zacks Pollution Control industry, which comes under the ambit of the Zacks Industrial Products sector. The industry is in the top 26% (with a rank of 69) of more than 250 Zacks industries.
In the past year, the company’s shares have gained 5.9% compared with the industry’s growth of 23.2%
What’s Making DCI an Attractive Investment Option for 2022?
Donaldson’s results in the first quarter of fiscal 2022 (ended Oct 31, 2021) were impressive, with earnings beating the Zacks Consensus Estimate by 10.91%.The bottom line expanded 27.1% from 48 cents reported in the first quarter of fiscal 2021. The Zacks Consensus Estimate for earnings is pegged at 62 cents per share for the second quarter of fiscal 2022 (ending January 2022) and 70 cents per share for the third quarter of fiscal 2022 (ending April 2022).
Several factors are in favor of Donaldson’s prospects for fiscal 2022 (ending July 2022). Solid product offerings, healthy demand and exposure to the diversified end markets are boons for the company. Focus on innovation, the benefits from buyouts and shareholder-friendly policies also raise the stock’s attractiveness. The company acquired Solaris Biotechnology in November 2021. This buyout is predicted to boost DCI’s presence in life sciences, food and beverage and biopharma end markets.
Segmental growth prospects are healthy for Donaldson. A rise in equipment production and projects wins are predicted to favor the Off-Road business in fiscal 2022. Aftermarket businesses are anticipated to gain from the solid utilization rate of equipment and a rise in market penetration. Aerospace and defense businesses are also predicted to be healthy. These tailwinds, partially offset by weakness in the On-Road business, are likely to favor the Engine Products segment. Also, the Industrial Products segment is likely to benefit from growth in Gas Turbine Systems, Industrial Filtration Solutions and Special Applications.
For fiscal 2022, Donaldson anticipates year-over-year revenue growth of 8-12%, up from 5-10% stated earlier. Adjusted earnings per share are estimated in the range of $2.57-$2.73, up from the previously guided $2.50-$2.66. Sales growth for the Engine Products segment and the Industrial Products segment is predicted to be 8-12% and 7-11%, respectively.
The Zacks Consensus Estimate for Donaldson’s earnings per share is pegged at $2.68 for fiscal 2022 and $2.97 for fiscal 2023 (ending July 2023), suggesting year-over-year growth of 15.5% and 10.8%, respectively. The consensus estimate has increased 1.9% for fiscal 2022 and 2.1% for fiscal 2023 in past the 60 days.
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Donaldson Company, Inc. (DCI - Free Report) specializes in manufacturing and selling filtration systems and replacement parts worldwide. Its impressive financial performance and solid growth opportunities support upward revision in the company’s earnings estimates.
The Bloomington, MN-based company presently carries a Zacks Rank #2 (Buy). The stock belongs to the Zacks Pollution Control industry, which comes under the ambit of the Zacks Industrial Products sector. The industry is in the top 26% (with a rank of 69) of more than 250 Zacks industries.
In the past year, the company’s shares have gained 5.9% compared with the industry’s growth of 23.2%
What’s Making DCI an Attractive Investment Option for 2022?
Donaldson’s results in the first quarter of fiscal 2022 (ended Oct 31, 2021) were impressive, with earnings beating the Zacks Consensus Estimate by 10.91%.The bottom line expanded 27.1% from 48 cents reported in the first quarter of fiscal 2021. The Zacks Consensus Estimate for earnings is pegged at 62 cents per share for the second quarter of fiscal 2022 (ending January 2022) and 70 cents per share for the third quarter of fiscal 2022 (ending April 2022).
Several factors are in favor of Donaldson’s prospects for fiscal 2022 (ending July 2022). Solid product offerings, healthy demand and exposure to the diversified end markets are boons for the company. Focus on innovation, the benefits from buyouts and shareholder-friendly policies also raise the stock’s attractiveness. The company acquired Solaris Biotechnology in November 2021. This buyout is predicted to boost DCI’s presence in life sciences, food and beverage and biopharma end markets.
Segmental growth prospects are healthy for Donaldson. A rise in equipment production and projects wins are predicted to favor the Off-Road business in fiscal 2022. Aftermarket businesses are anticipated to gain from the solid utilization rate of equipment and a rise in market penetration. Aerospace and defense businesses are also predicted to be healthy. These tailwinds, partially offset by weakness in the On-Road business, are likely to favor the Engine Products segment. Also, the Industrial Products segment is likely to benefit from growth in Gas Turbine Systems, Industrial Filtration Solutions and Special Applications.
For fiscal 2022, Donaldson anticipates year-over-year revenue growth of 8-12%, up from 5-10% stated earlier. Adjusted earnings per share are estimated in the range of $2.57-$2.73, up from the previously guided $2.50-$2.66. Sales growth for the Engine Products segment and the Industrial Products segment is predicted to be 8-12% and 7-11%, respectively.
The Zacks Consensus Estimate for Donaldson’s earnings per share is pegged at $2.68 for fiscal 2022 and $2.97 for fiscal 2023 (ending July 2023), suggesting year-over-year growth of 15.5% and 10.8%, respectively. The consensus estimate has increased 1.9% for fiscal 2022 and 2.1% for fiscal 2023 in past the 60 days.
Zacks Naming Top 10 Stocks for 2024
Want to be tipped off early to our 10 top picks for the entirety of 2024?
History suggests their performance could be sensational.
From 2012 (when our Director of Research, Sheraz Mian assumed responsibility for the portfolio) through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2024. Don’t miss your chance to get in on these stocks when they’re released on January 2.
Be First to New Top 10 Stocks >>
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