Parker Hannifin Earnings: Aerospace Continues Its Run; Full-Year Profit Guidance Raised

Narrow-moat-rated Parker Hannifin reported solid results for the fiscal third quarter, driven by another strong performance in aerospace. Consolidated organic revenue increased 1.2% year over year to $5.1 billion, and adjusted segment margin expanded 150 basis points to 24.7%. End-market demand in the aerospace segment soared during the quarter, while industrial North America and international lagged, albeit in line with expectations. Based on the recent results in aerospace and industrial, we have adjusted our near-term organic growth levels for both segments. As such, we have raised our fair value estimate to $431 per share from $417 because of higher consolidated profitability and time value of money effects.