Parker Earnings: Results As Expected, but Long-Term Reassessment Means We Raise Our Fair Value 15%

After reviewing narrow-moat Parker Hannifin’s fiscal fourth quarter and full-year results, we lift our fair value estimate by 15% to $384. The primary driver of our strong raise stems from the additional year of revenue contribution following our annual model roll. The additional year has outsize benefits given our view Parker can maintain structurally better-operating margins as it continues implementing its Win Strategy 3.0. However, we also lifted our revenue assumptions in the outer years of our model following a reassessment of Parker’s end markets and its competitive position within those markets.