Donaldson (DCI) Rating Increased to Hold at Zacks Investment Research

Zacks Investment Research upgraded shares of Donaldson (NYSE:DCI) from a sell rating to a hold rating in a research report released on Tuesday morning.

According to Zacks, “In the past six months, Donaldson's shares have outperformed the industry. The company perceives that stronger top-line performance, as well as ongoing price realization and cost reduction moves will likely continue to boost up its profitability in the quarters ahead. Moreover, new innovation investments and increased capital expenditure projects will likely aid in boosting up its revenues and profitability going forward. However, over the past six-month period the stock looks overvalued compared to its industry. Also, material price inflation and soaring freight charges is predicted to weigh over Donaldson's near-term margins. Weakening Gas Turbine Systems business also remains a major cause of concern for the company. In the past 7 days, earnings estimates on the stock remained stable for both for fiscal 2019 and fiscal 2020.”

A number of other research firms have also recently weighed in on DCI. Oppenheimer reaffirmed a hold rating on shares of Donaldson in a report on Tuesday, December 4th. Stifel Nicolaus reaffirmed a hold rating and issued a $53.00 price objective on shares of Donaldson in a report on Thursday, December 6th. ValuEngine cut shares of Donaldson from a buy rating to a hold rating in a report on Tuesday, December 18th. SunTrust Banks reaffirmed a hold rating and issued a $56.00 price objective on shares of Donaldson in a report on Thursday, December 6th. Finally, Robert W. Baird reaffirmed a hold rating and issued a $52.00 price objective on shares of Donaldson in a report on Friday, December 21st. Six analysts have rated the stock with a hold rating and two have assigned a buy rating to the stock. The company presently has a consensus rating of Hold and a consensus price target of $55.25.

DCI stock opened at $48.85 on Tuesday. The company has a debt-to-equity ratio of 0.74, a quick ratio of 1.66 and a current ratio of 2.40. Donaldson has a fifty-two week low of $40.27 and a fifty-two week high of $59.43. The stock has a market capitalization of $6.11 billion, a P/E ratio of 24.43, a PEG ratio of 1.74 and a beta of 1.41.

Donaldson (NYSE:DCI) last released its quarterly earnings data on Tuesday, December 4th. The industrial products company reported $0.56 earnings per share for the quarter, missing the Zacks’ consensus estimate of $0.57 by ($0.01). Donaldson had a return on equity of 32.75% and a net margin of 6.92%. The firm had revenue of $701.40 million during the quarter, compared to analyst estimates of $700.98 million. During the same period last year, the business earned $0.46 EPS. The firm’s revenue was up 8.8% on a year-over-year basis. As a group, research analysts forecast that Donaldson will post 2.39 earnings per share for the current fiscal year.

The business also recently announced a quarterly dividend, which will be paid on Thursday, February 28th. Shareholders of record on Monday, February 11th will be paid a dividend of $0.19 per share. The ex-dividend date is Friday, February 8th. This represents a $0.76 annualized dividend and a yield of 1.56%. Donaldson’s payout ratio is 38.00%.

Institutional investors have recently added to or reduced their stakes in the business. Dimensional Fund Advisors LP increased its stake in Donaldson by 2.8% during the 3rd quarter. Dimensional Fund Advisors LP now owns 1,032,453 shares of the industrial products company’s stock valued at $60,151,000 after buying an additional 28,198 shares during the period. Fenimore Asset Management Inc. increased its stake in Donaldson by 7.0% during the 4th quarter. Fenimore Asset Management Inc. now owns 1,251,338 shares of the industrial products company’s stock valued at $54,296,000 after buying an additional 82,335 shares during the period. Thrivent Financial for Lutherans increased its stake in Donaldson by 5.8% during the 3rd quarter. Thrivent Financial for Lutherans now owns 31,322 shares of the industrial products company’s stock valued at $1,825,000 after buying an additional 1,731 shares during the period. Highwater Wealth Management LLC acquired a new position in Donaldson during the 4th quarter valued at about $27,000. Finally, ING Groep NV acquired a new position in Donaldson during the 3rd quarter valued at about $217,000. 83.47% of the stock is currently owned by hedge funds and other institutional investors.

About Donaldson

Donaldson Company, Inc manufactures and sells filtration systems and replacement parts worldwide. It operates through Engine Products and Industrial Products segments. The Engine Products segment offers replacement filters for air and liquid filtration applications, air filtration systems, liquid filtration systems for fuel, lube and hydraulic applications, and exhaust and emissions systems.

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