Parker Hannifin Earnings: Aerospace Drives Growth as End-Market Demand Remains Robust

Narrow-moat-rated Parker Hannifin reported strong fiscal second-quarter results. Revenue rose 3% year over year on an organic basis. Adjusted segment operating margins rose 300 basis points to an impressive 24.5%, led by continued strength in the company’s aerospace business. The North America and international industrial segments also experienced adjusted operating margin expansion during the quarter. Parker continues to execute its cost-savings initiatives while capitalizing on end-market demand, a trend we think will drive margin expansion for the remainder of the fiscal year. As such, we've increased our fair value estimate to $417 from $411 per share due to higher near-term profitability in our forecast.