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what it is
Parker makes motion-control parts and systems for planes, factories, and trucks, per company filings.
how it gets paid
Last year Parker-Hannifin made $19.9B in revenue. Industrial motion systems was the main engine at $7.5B, or 38% of sales.
why growth slowed
Revenue fell 0.4% last year. The 7.75% EPS beat matters because a stock at 32.4x needs clean quarters.
what just happened
Parker posted $10.3B of revenue and beat the $7.1 EPS estimate with $7.65.
At a glance
A balance sheet — strong enough to weather a downturn
95/100 earnings predictability — you can trust these numbers
32.4x trailing p/e — you're paying up for this one
0.8% dividend yield — cash in your pocket every quarter
19.5% return on capital — nothing to write home about
xvary composite: 81/100 — above average
What they do
Parker makes motion-control parts and systems for planes, factories, and trucks, per company filings.
Parker sells the parts that keep machines moving. Once your equipment is built around its components, swapping them means downtime, retesting, and new approvals. That is how a company with 95% earnings predictability (profits have stayed steady) and 19.5% return on capital keeps charging more.
How they make money
$19.9B
annual revenue · their business grew -0.4% last year
Industrial motion systems
$7.5B
+10.0%
Aerospace Systems
$6.2B
+15.0%
Fluid connectors
$3.2B
+10.0%
Filtration and instrumentation
$3.0B
+8.0%
The products that matter
flight control and fuel systems
Aerospace Systems
$7.5B · +15% growth
This is a $7.5B segment with 27.5% operating margin. Orders rose 15% in the latest period, which helps explain why the backlog keeps getting market attention.
27.5% margin
hydraulics, pneumatics, and seals
Industrial Motion & Control
$9.5B · -2% growth
This is still the largest business at $9.5B. It runs across 800,000+ parts, and a big part of the case is replacement demand holding up even when new equipment slows.
largest segment
filtration and engineered materials
Filtration & Engineered Materials
$2.9B · +3% growth
This roughly $3B business adds higher-value filtration exposure across aviation and industry. It matters less for size than for mix.
mix support
Key numbers
$1175
target price
That is $288.53 above the current $886.47 price, or 33% upside.
32.4x
trailing p/e
You are paying 32.4 times trailing earnings. The 0.8% dividend does little to cushion that price.
19.5%
return on capital
Each dollar invested has produced 19.5 cents of operating profit. That is why the market pays up for the name.
$11.3B
backlog
Backlog is $11.3B. That is revenue visibility, not hope.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 2 — safer than 80% of stocks
- price stability 75 / 100
- long-term debt $7.5B (6% of capital)
- net profit margin 19.1% — keeps 19 cents of every dollar in revenue
- return on equity 27% — $0.27 profit for every $1 investors have put in
A with balance sheet grade and risk rank standing out. your money faces less risk here than at most public companies.
Total return vs. market
You invested $10,000 in PH 3 years ago → it's now worth $31,630.
The index would have given you $13,920.
source: institutional data · total return
What just happened
beat estimates
Parker posted $10.3B of revenue and beat the $7.1 EPS estimate with $7.65.
Revenue was $10.3B, and EPS beat by 7.75%. Backlog reached $11.3B, and aerospace order rates were up 15%.
$5.0B
revenue
$7.65
eps
27.5%
operating margin
beat size
The 7.75% EPS beat matters because a stock at 32.4x needs clean quarters, not excuses.
-
we expect another year of good growth at parker-hannifin in fiscal 2026 (ends june 30th).
-
the company got off to a great start with a 16% jump in profits in the september quarter to a record level of $7.22 a share, which was well ahead of the consensus forecast of $6.70.
-
the aerospace business is expected to remain strong in coming quarters with order rates up 15% in the latest period.
-
backlog for the company as a whole is at an all-time high of $11.3 billion.
-
we estimate that earnings per share for the full fiscal year will reach the $30.00-per-share mark, up 10% from the prior year.
source: company earnings report, 2026
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What could go wrong
the top risk is backlog and aerospace momentum cooling before the valuation does.
high
backlog normalization
The stock is leaning heavily on a record $11.3B backlog. If orders slow or customers push deliveries out, the market loses one of its main reasons for paying 32.4x earnings.
This directly pressures the premium multiple attached to a $112B company.
high
Meggitt integration and cost-savings delivery
The $8.2B Meggitt deal added $3B+ in aerospace revenue. If integration is messier than planned, the promised $300M in cost savings looks more theoretical than real.
That puts $3B+ of acquired aerospace revenue and a major piece of the margin story under pressure.
med
industrial demand staying soft
Industrial Motion & Control is still the largest segment at $9.5B, and it declined 2%. If that weakness spreads, aerospace has to do even more of the lifting.
This touches the biggest revenue pool in the company.
med
valuation compression
At 32.4x trailing earnings, the stock is priced for consistency, not excuses. If growth drifts back toward low-single digits without more margin expansion, the multiple has room to fall even if the business stays good.
You do not need a disaster for the stock to de-rate. You just need the story to get less impressive.
You own a very solid business priced like execution will stay very solid. If the backlog fades, aerospace cools, or integration slips, the valuation has less margin for error than the balance sheet does.
source: institutional data · regulatory filings · risk analysis
Pay attention to
the key metric
backlog conversion
$11.3B in backlog is the headline. What matters next is how much converts into revenue without margin slippage.
segment trend
aerospace versus industrial
Aerospace grew 15% while Industrial Motion & Control fell 2%. If that gap widens, you are owning two different stories inside one ticker.
calendar
next earnings print
The next update needs to defend the new $30.70 EPS guide. Premium multiples need regular proof.
risk
Meggitt cost-savings progress
The deal added scale. Now management has to prove the $300M cost-savings case shows up in the numbers, not just the slide deck.
Analyst rankings
earnings predictability
95 / 100
Management tends to guide cleanly and deliver close to plan. In human-speak: analysts trust this company more than most industrials.
risk rank
2
This is a safer stock than roughly 80% of the market. Safer does not mean cheap.
price stability
75 / 100
The shares move less erratically than a typical cyclical name. You get industrial exposure without full rollercoaster energy.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 748 buyers vs. 673 sellers in 3q2025. total institutional holdings: 0.1B shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$546
$1076
$886
current price
$1175
target midpoint · +33% from current · 3-5yr high: $1350 (+50% · 12% ann'l return)
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