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Parker-Hannifin Corporation (PH) Hit a 52 Week High, Can the Run Continue?
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Shares of Parker-Hannifin (PH - Free Report) have been strong performers lately, with the stock up 4.2% over the past month. The stock hit a new 52-week high of $479.14 in the previous session. Parker-Hannifin has gained 3.7% since the start of the year compared to the 16.8% move for the Zacks Industrial Products sector and the 24.8% return for the Zacks Manufacturing - General Industrial industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 2, 2023, Parker-Hannifin reported EPS of $5.96 versus consensus estimate of $5.33.
For the current fiscal year, Parker-Hannifin is expected to post earnings of $23.24 per share on $19.98 billion in revenues. This represents a 7.84% change in EPS on a 4.8% change in revenues. For the next fiscal year, the company is expected to earn $25.28 per share on $20.67 billion in revenues. This represents a year-over-year change of 8.77% and 3.47%, respectively.
Valuation Metrics
Parker-Hannifin may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Parker-Hannifin has a Value Score of C. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 20.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.8X. On a trailing cash flow basis, the stock currently trades at 17X versus its peer group's average of 14.2X. Additionally, the stock has a PEG ratio of 1.94. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Parker-Hannifin currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Parker-Hannifin meets the list of requirements. Thus, it seems as though Parker-Hannifin shares could have potential in the weeks and months to come.
How Does PH Stack Up to the Competition?
Shares of PH have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Flowserve Corporation (FLS - Free Report) . FLS has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of C, and a Momentum Score of C.
Earnings were strong last quarter. Flowserve Corporation beat our consensus estimate by 21.95%, and for the current fiscal year, FLS is expected to post earnings of $2.54 per share on revenue of $4.29 billion.
Shares of Flowserve Corporation have gained 1.1% over the past month, and currently trade at a forward P/E of 16.12X and a P/CF of 22.75X.
The Manufacturing - General Industrial industry is in the top 29% of all the industries we have in our universe, so it looks like there are some nice tailwinds for PH and FLS, even beyond their own solid fundamental situation.
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Parker-Hannifin Corporation (PH) Hit a 52 Week High, Can the Run Continue?
Shares of Parker-Hannifin (PH - Free Report) have been strong performers lately, with the stock up 4.2% over the past month. The stock hit a new 52-week high of $479.14 in the previous session. Parker-Hannifin has gained 3.7% since the start of the year compared to the 16.8% move for the Zacks Industrial Products sector and the 24.8% return for the Zacks Manufacturing - General Industrial industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 2, 2023, Parker-Hannifin reported EPS of $5.96 versus consensus estimate of $5.33.
For the current fiscal year, Parker-Hannifin is expected to post earnings of $23.24 per share on $19.98 billion in revenues. This represents a 7.84% change in EPS on a 4.8% change in revenues. For the next fiscal year, the company is expected to earn $25.28 per share on $20.67 billion in revenues. This represents a year-over-year change of 8.77% and 3.47%, respectively.
Valuation Metrics
Parker-Hannifin may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Parker-Hannifin has a Value Score of C. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 20.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.8X. On a trailing cash flow basis, the stock currently trades at 17X versus its peer group's average of 14.2X. Additionally, the stock has a PEG ratio of 1.94. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Parker-Hannifin currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Parker-Hannifin meets the list of requirements. Thus, it seems as though Parker-Hannifin shares could have potential in the weeks and months to come.
How Does PH Stack Up to the Competition?
Shares of PH have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Flowserve Corporation (FLS - Free Report) . FLS has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of C, and a Momentum Score of C.
Earnings were strong last quarter. Flowserve Corporation beat our consensus estimate by 21.95%, and for the current fiscal year, FLS is expected to post earnings of $2.54 per share on revenue of $4.29 billion.
Shares of Flowserve Corporation have gained 1.1% over the past month, and currently trade at a forward P/E of 16.12X and a P/CF of 22.75X.
The Manufacturing - General Industrial industry is in the top 29% of all the industries we have in our universe, so it looks like there are some nice tailwinds for PH and FLS, even beyond their own solid fundamental situation.