Analyst Note| Joshua Aguilar |
Narrow-moat rated Parker Hannifin had a strong fiscal fourth quarter that easily blew past our expectations thanks to strong margin performance. We plan on lifting our fair value estimate by about a mid-single-digit percentage, though that could change as we look through the 10-K and roll our model for the close of fiscal 2020 (our published fair value estimate currently stands at $178, and time value of money alone adds about $4 to $5 to our fair value). While revenue came in largely as we expected (although diversified industrial international outperformed), the diversified industrial international portion of Parker’s business roared past our expectations on the margin front. That said, our enthusiasm is slightly tempered by a guide that came in modestly below our current expectations for next year.