Parker-Hannifin Corp Scores High on P/E/Growth Model

Parker-Hannifin Corp excels in the P/E/Growth Investor model. The stock rates 87%, signaling solid fundamentals and balanced valuation, presenting a compelling case for professional investors focused on growth opportunities.

Date: 29-05-2025

AI Rating: 7

Overview of Parker-Hannifin Corp's Performance
Parker-Hannifin Corp (PH) has obtained an impressive rating of 87% under the P/E/Growth Investor model championed by Peter Lynch, reflecting its strong fundamentals and valuation. Over half of the evaluated strategies pass this model, indicating that the stock is fundamentally sound. Key metrics such as the P/E ratio, sales and P/E ratio, inventory-to-sales ratio, and EPS growth rate have all passed scrutiny, showcasing robust operational efficiency and earnings generation potential.

Key Metrics Analysis
- **Earnings Per Share (EPS)**: The report indicates that PH's EPS growth rate is strong and has passed the evaluation criteria. Given that EPS is a critical measure of a company's profitability on a per-share basis, this shows an upward trend that could signal growing profitability into the future, a positive indicator for investors.
- **Revenue Growth**: Not directly mentioned, but with a high EPS growth and positive ratings in related areas, it can be inferred that revenue holds a similar growth projection, aligning with investor commitments.
- **Free Cash Flow (FCF)**: The report noted a 'neutral' rating for free cash flow. While not negative, it does suggest that the company is not generating excess cash that could be deployed for further investments or shareholder returns, a slight drawback.
- **Net Income**: While specific figures weren't provided, strong EPS and P/E metrics hint at an improving net income position, supporting investor confidence.
- **Profit Margins (Gross, Operating, Net)**: These metrics were not explicitly discussed, yet they are likely in alignment with the overall strong ratings if EPS has passed.
- **Return on Equity (ROE)**: This vital metric was not provided; however, the strong fundamentals could suggest a healthy ROE.

In summary, Parker-Hannifin is positioned favorably for professional investors. The high score under Lynch's model, coupled with strong EPS growth, offers a strong indication of potential upward price moves. However, caution is advised regarding free cash flow, which might affect future growth strategies.

Stocks: PH