After Parker-Hannifin Corp PH significantly lowered its fiscal 2020 outlook, the current outlook appears de-risked, while the industrial economy seems poised to return to growth in the second quarter of next year, according to Stifel.
The Analyst
Stifel’s Nathan Jones upgraded Parker-Hannifin from Hold to Buy while raising the price target from $199 to $229.
The Thesis
Current macro trends suggest that the industrial recession would be a shallow one and growth in the industrial economy could resume in the second quarter of 2020, Jones said in the note.
Since Parker-Hannifin is “an early cycle company with exposure to inventory cycles,” it could experience early recovery, the analyst mentioned. He added that this de-risks Parker-Hannifin’s outlook and should inspire investor confidence in the company achieving the current guidance and growth returning in fiscal 2021.
Parker-Hannifin has a track record of generating strong cash flows and this could grow “considerably” as the industrial economy resumes its growth and the company generates synergies from its recent acquisitions of Lord Corporation and Exotic Materials, Jones said.
He believes Parker-Hannifin’s stock represents “very good value for investors at this price.”
Price Action
Shares of Parker-Hannifin were trading lower by 0.80% at $205.95 at the time of publishing Tuesday.
Related Links
10 Biggest Price Target Changes For Tuesday
Benzinga's Top Upgrades, Downgrades For Dec. 16, 2019
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
|---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
