Donaldson Company (DCI) AI Stock Analysis

• Market Cap: $8.10B
• Dividend Yield: 1.55%
• Average Volume (3M): 490.92K
• Price to Earnings (P/E): 23.5
• Beta (1Y): 0.87
• Revenue Growth: 3.26%
• EPS Growth: -7.70%
• Country: US
• Employees: 14,000
• Sector: Industrials
• Sector Strength: 93
• Industry: Industrial - Machinery
• EPS (TTM): 0.99
• Shares Outstanding: 116,519,940
• 10 Day Avg. Volume: 556,696
• 30 Day Avg. Volume: 490,916
• PEG Ratio: -33.68
• Price to Book (P/B): 5.21
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 23.25
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $69.25
• Price Target Upside: -0.87% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 71 Outperform
• Price Target: $77.00 ▲(10.22%Upside)

Donaldson Company's overall stock score is driven by its strong financial performance, which is the most significant factor, contributing to stability and growth potential. Technical analysis and valuation present moderate concerns, while positive earnings call insights and corporate events further support investor sentiment.

Positive Factors

Financial Performance

Donaldson reported 7% earnings growth in the third quarter, supported by cost optimization efforts.

Investor Relations

Donaldson's leadership team participated in a notable growth stock conference, indicating active engagement with investors and stakeholders.

Shareholder Returns

The dividend per share has been raised by 11% year over year, which is likely to support positive sentiment for the stock.

Negative Factors

Bioprocessing Challenges

Donaldson’s bioprocessing business continues to face significant challenges, evidenced by the $62 million pretax impairment charge on intangible assets.

Core Business Softness

There is ongoing softness in the company's core businesses of Mobile Solutions and Industrial Solutions, which more than offsets improvements in other areas.

Revenue Decline

Donaldson reported second-quarter revenue and earnings below consensus estimates.

Donaldson Company Business Overview & Revenue Model

Company Description

Donaldson Company, Inc. manufactures and sells filtration systems and replacement parts worldwide. The company operates through two segments, Engine Products and Industrial Products. Its Engine Products segment provides replacement filters for air and liquid filtration applications; air filtration systems; liquid filtration systems for fuel, lube, and hydraulic applications; exhaust and emissions systems and sensors; indicators; and monitoring systems. This segment sells its products to original equipment manufacturers (OEMs) in the construction, mining, agriculture, aerospace, defense, and transportation markets; and to independent distributors, OEM dealer networks, private label accounts, and large fleets. The company's Industrial Products segment offers dust, fume, and mist collectors; compressed air purification systems; gas and liquid filtration for food, beverage, and industrial processes; air filtration systems for gas turbines; polytetrafluoroethylene membrane-based products; and specialized air and gas filtration systems for applications, including hard disk drives, semi-conductor manufacturing and sensors, indicators, and monitoring systems. This segment sells its products to various dealers, distributors, OEMs of gas-fired turbines, and OEMs and end-users requiring air filtration solutions and replacement filters. Donaldson Company, Inc. was founded in 1915 and is headquartered in Bloomington, Minnesota.

How the Company Makes Money

Donaldson Company makes money through the sale of its filtration systems and replacement parts across various industries. Key revenue streams include its Engine Products segment, which provides filtration solutions for construction, agriculture, and transportation equipment, and its Industrial Products segment, which caters to manufacturing, aerospace, and other industrial sectors. The company capitalizes on aftermarket sales, which provide a steady stream of revenue through replacement parts and maintenance services. Additionally, strategic partnerships and long-term contracts with original equipment manufacturers (OEMs) and distributors contribute significantly to its earnings. Donaldson's focus on research and development ensures a competitive edge, allowing it to innovate and meet evolving customer needs, further driving revenue growth.

Donaldson Company Financial Statement Overview

Summary

Donaldson Company shows strong financial health with consistent revenue and profit growth, solid margins, and efficient capital management. Income statement metrics indicate strong profitability, with a gross profit margin of 35.4% and a net profit margin of 11.5%. The balance sheet is robust with moderate leverage and a strong ROE of 27.1%, while cash flow remains healthy with efficient cash conversion.

Income Statement

Donaldson Company demonstrates strong income statement metrics, with a consistent increase in total revenue, gross profit, and net income over the years. The gross profit margin for TTM (Trailing-Twelve-Months) is approximately 35.4%, and the net profit margin is about 11.5%, indicating solid profitability. Revenue growth has been steady, with a notable increase from previous periods. EBIT and EBITDA margins are also healthy at 15.0% and 16.6%, respectively, reflecting operational efficiency.

Balance Sheet

The balance sheet of Donaldson Company is robust, with a debt-to-equity ratio of 0.36 for the TTM, indicating moderate leverage. The return on equity (ROE) is strong at approximately 27.1%, showcasing effective equity utilization. The equity ratio stands at 52.2%, suggesting a well-capitalized company with a balanced asset structure. However, a slight increase in total debt over time is a point to monitor.

Cash Flow

Donaldson Company maintains a healthy cash flow position, with a stable operating cash flow and a positive free cash flow. The free cash flow growth rate shows slight fluctuations but remains positive. The operating cash flow to net income ratio is approximately 1.03, indicating efficient cash conversion. The free cash flow to net income ratio is around 0.87, reflecting strong cash generation relative to profits.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
3.63B	3.59B	3.43B	3.31B	2.85B	2.58B
	Gross Profit
1.29B	1.27B	1.16B	1.07B	971.70M	871.60M
	EBIT
546.10M	544.10M	480.20M	443.50M	384.70M	340.10M
	EBITDA
653.00M	655.10M	580.20M	547.60M	489.30M	440.20M
	Net Income Common Stockholders
418.10M	414.00M	358.80M	332.80M	286.90M	257.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
189.10M	232.70M	187.10M	193.30M	222.80M	236.60M
	Total Assets
2.96B	2.91B	2.77B	2.60B	2.40B	2.24B
	Total Debt
577.40M	536.70M	655.70M	648.00M	527.60M	700.70M
	Net Debt
388.30M	304.00M	468.60M	454.70M	304.80M	464.10M
	Total Liabilities
1.42B	1.43B	1.45B	1.47B	1.26B	1.25B
	Stockholders Equity
1.54B	1.49B	1.32B	1.13B	1.14B	992.90M
Cash Flow		Free Cash Flow
345.80M	406.90M	426.40M	167.70M	343.60M	264.60M
	Operating Cash Flow
430.80M	492.50M	544.50M	252.80M	401.90M	387.00M
	Investing Cash Flow
-157.50M	-86.90M	-327.30M	-154.00M	-58.30M	-128.90M
	Financing Cash Flow
-272.70M	-355.90M	-222.20M	-114.20M	-363.30M	-199.50M

Donaldson Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 69.86
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DCI, the sentiment is Positive. The current price of 69.86 is above the 20-day moving average (MA) of 69.54, above the 50-day MA of 66.64, and below the 200-day MA of 70.21, indicating a neutral trend. The MACD of 0.75 indicates Positive momentum. The RSI at 57.45 is Neutral, neither overbought nor oversold. The STOCH value of 28.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DCI.

Donaldson Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ITT	82 Outperform	$11.87B	24.00	19.27%	0.87%	6.99%	23.25%
WTS	79 Outperform	$8.04B	27.58	17.61%	0.76%	3.89%	8.17%
RRX	72 Outperform	$9.02B	38.75	3.69%	1.03%	-10.19%	―
DCI	71 Outperform	$8.10B	23.46	24.58%	1.55%	3.26%	-7.70%
AOS	70 Outperform	$9.09B	17.90	27.97%	2.09%	-1.60%	-7.12%
MWA	69 Neutral	$3.84B	26.81	17.68%	1.09%	10.96%	43.44%
Sector *	66 Neutral	$4.49B	12.28	5.32%	248.53%	4.08%	-12.00%

Donaldson Company Corporate Events

Donaldson Company Appoints New COO Amidst Strong Q3 Results

On June 2, 2025, Donaldson Company announced the appointment of Richard B. Lewis as Chief Operating Officer, effective August 1, 2025, with a significant increase in his compensation package. In its third quarter fiscal 2025 report, Donaldson highlighted record sales and adjusted earnings per share, despite a decrease in GAAP net earnings due to non-recurring charges. The company raised its full-year adjusted EPS guidance, accelerated share repurchases, and increased its quarterly dividend by 11%, reinforcing its strong market position and commitment to returning cash to shareholders.

The most recent analyst rating on (DCI) stock is a Hold with a $71.00 price target. To see the full list of analyst forecasts on Donaldson Company stock, see the DCI Stock Forecast page.

Donaldson Company’s President Announces Retirement

On May 14, 2025, Thomas R. Scalf, President of Enterprise Operations and Supply Chain at Donaldson Company, announced his retirement effective August 1, 2025. Post-retirement, he will provide consulting services to the company until December 31, 2025, to ensure a smooth transition, receiving $40,000 monthly during this period.

The most recent analyst rating on (DCI) stock is a Hold with a $71.00 price target. To see the full list of analyst forecasts on Donaldson Company stock, see the DCI Stock Forecast page.