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Donaldson Co Inc DCI

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Morningstar’s Analysis

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Donaldson Ends Fiscal 2021 on a Solid Note; Raising FVE to $55

Analyst Note

| Krzysztof Smalec, CFA |

There were no major surprises in Donaldson’s fiscal fourth-quarter earnings release, as sales and EPS both came in roughly in line with our expectations. Our prior fiscal 2022 EPS estimate of $2.60 was also within management’s guidance range for full-year fiscal 2022 GAAP EPS of $2.50 to $2.66. After rolling our model forward one year, we’ve bumped our fair value estimate for Donaldson to $55 from $54, as our revised forecast and time value of money were partially offset by the impact of a probability-weighted upward change in the U.S. statutory tax rate assumption in our model. We see shares as modestly overvalued at current levels, and we’d prefer to wait for a more attractive entry point before investing in the narrow moat-rated name.

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Company Profile

Business Description

Donaldson is a leading manufacturer of filtration systems and replacement parts (including air filtration systems, liquid filtration systems, and dust, fume, and mist collectors). The company serves a diverse range of end markets, including construction, mining, agriculture, truck, and industrial. Its business is organized into two segments: engine products and industrial products. Donaldson generated approximately $2.9 billion in revenue and $385 million in operating income in its fiscal 2021.

1400 West 94th Street
Minneapolis, MN, 55431
T +1 952 887-3131
Sector Industrials
Industry Specialty Industrial Machinery
Most Recent Earnings Jul 31, 2021
Fiscal Year End Jul 30, 2022
Stock Type Cyclical
Employees 13,100