Market Overview

Parker-Hannifin's Concerning Outlook Prompts Argus To Move To The Sidelines

Share:
Parker-Hannifin's Concerning Outlook Prompts Argus To Move To The Sidelines

Parker-Hannifin Corp (NYSE: PH), a manufacturer of motion and control technologies and systems to control fluids, gas or air, disappointed Argus in its fiscal 2019 outlook which prompted the research firm to downgrade the stock.

The Analyst

Argus' John Eade downgraded Parker-Hannifin from Buy to Hold with no assigned price target.

The Thesis

Parker-Hannifin reported its fourth-quarter results in early August, which "easily topped" consensus estimates and highlighted by a 31-percent earnings growth to $3.22 per share and revenue rose 9 percent, Eade said in a note. However, guidance disappointed as the company expects to see an organic sales growth rate of 2.3-4.1 percent and earnings growth of 3-10 percent.

Management's guidance implies a slowdown in top-line growth while margins are likely to be pressured by inflation and tariffs. As such, the analyst said near-term trends are now seen as "problematic" and the company's potential problems are industry-wide. In fact, the sector as a whole could see industry valuations remain compressed and investors should seek out other industrial stocks with stronger growth profiles.

Parker-Hannifin's stock has underperformed the broader market over the past year and since peaking at $212 in January, shares have shown a bearish pattern with lower highs and lower lows, the analyst wrote.

Price Action

Shares of Parker-Hannifin were trading around $166.83 at time of publication.

Related Links:

Parker-Hannifin's 5-Year Outlook Impresses Analysts

A Few Positive Aspects Of Parker-Hannifin Already Priced In; Buckingham Downgrades

Latest Ratings for PH

DateFirmActionFromTo
Aug 2019MaintainsHold
Aug 2019MaintainsEqual-Weight
Jul 2019DowngradesNeutralSell

View More Analyst Ratings for PH
View the Latest Analyst Ratings

Posted-In: Argus Industrial John EadeAnalyst Color Downgrades Analyst Ratings Best of Benzinga

 

Related Articles (PH)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
ELMDDougherty & Co.Initiates Coverage On12.0
MRNSCantor FitzgeraldAssumes7.0
MNRLCapital One FinancialInitiates Coverage On23.0
SONVertical GroupUpgrades
UNPMorgan StanleyMaintains136.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Visa Looks Ready To Head Back To Its All-Time High

The Most Searched Questions About Jeff Bezos