Donaldson Company (DCI)
NYSE:DCI
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Donaldson Company
(NYSE:DCI)
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Rating:70Outperform
Price Target:
$98.00
▲(10.55% Upside)
Action:UpgradedDate:04/11/26
The score is driven primarily by solid underlying financial performance and constructive forward guidance pointing to record margins and EPS growth, partially offset by premium valuation and mixed technical momentum signals.
Positive Factors
Recurring aftermarket revenue
Donaldson’s business benefits from a large installed base and consumable replacement demand. The Facet purchase adds ~70% recurring regulated replacement revenue, strengthening predictable after‑sales cash flows and margin durability from repeat purchases and regulatory-driven service cadence.
Negative Factors
Margin compression from footprint/startups
Near‑term margin erosion reflects footprint optimization, new plant startups and volume deleverage. These structural execution items can persist through multi‑quarter learning curves, weighing operating leverage and earnings quality until efficiency gains and plant ramp benefits materialize.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring aftermarket revenue
Donaldson’s business benefits from a large installed base and consumable replacement demand. The Facet purchase adds ~70% recurring regulated replacement revenue, strengthening predictable after‑sales cash flows and margin durability from repeat purchases and regulatory-driven service cadence.
Read all positive factors
Donaldson Company (DCI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.27B
Dividend Yield1.28%
Average Volume (3M)751.79K
Price to Earnings (P/E)31.8
Beta (1Y)0.79
Revenue Growth2.37%
EPS Growth-6.93%
CountryUS
Employees14,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.83
Shares Outstanding115,814,240
10 Day Avg. Volume457,297
30 Day Avg. Volume751,786
Financial Highlights & Ratios
PEG Ratio-2.35
Price to Book (P/B)5.88
Price to Sales (P/S)2.31
P/FCF Ratio25.13
Enterprise Value/Market Cap1.05
Enterprise Value/Revenue2.87
Enterprise Value/Gross Profit8.34
Enterprise Value/Ebitda17.17
Forecast
1Y Price Target
$101.25Price Target Upside14.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)4
Revenue Forecast (FY)$3.82B
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...
How the Company Makes Money
DCI primarily makes money by selling filtration products and systems across two major channels: (1) sales to OEMs that integrate Donaldson filtration into new equipment and vehicles, and (2) recurring aftermarket sales of replacement filters and c...
Donaldson Company Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Jun 09, 2026
Earnings Call Sentiment Positive
The call presented a mix of short-term operational headwinds (gross margin pressure, footprint optimization costs, and segment execution issues) but emphasized strong underlying demand, record quarterly sales, robust backlogs, an acquisitive strategy (Facet) that is mix-accretive, and a reaffirmed full-year record sales/growth outlook with margin and EPS at all-time highs at the midpoint. Management expects sequential improvement in the second half driven by backlog conversion, improved plant efficiency, and cost discipline; Life Sciences and Mobile aftermarket strength, and Facet's addition are notable positives. Given the balance of solid forward guidance, strong cash metrics, and strategic upside versus temporary execution-related drag, the overall tone is constructive.Positive Updates
Record Quarterly Sales
Second quarter sales of $896 million, a 3% increase year-over-year, described as a company record driven by strength across all three segments and high order backlogs.
Negative Updates
Quarterly Gross Margin Pressure
Second quarter gross margin was 33.7%, down 150 basis points year-over-year, with contributions from volume deleverage (~60 bps), a Mexico Power Generation startup (~40 bps), and footprint/plant-closure costs (~30 bps).
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Sales
Second quarter sales of $896 million, a 3% increase year-over-year, described as a company record driven by strength across all three segments and high order backlogs.
Read all positive updates
Company Guidance
Management updated fiscal 2026 guidance calling for consolidated sales growth of 1%–5% (driving record sales of about $3.8 billion), with pricing and currency each contributing roughly 1% to growth; segment guidance is Mobile Solutions +2%–6% (aftermarket mid‑single digits, off‑road mid‑single digits, on‑road flat), Industrial Solutions −1% to +3% (IFS low‑single‑digit growth, A&D down mid‑single digits), and Life Sciences +5%–9%; operating margin is guided to 16.0%–16.4% (midpoint ~16.2%, a company‑record level), pretax Life Sciences margin mid‑ to high‑single digits, EPS $3.93–$4.01 (midpoint $3.97, ~8% above prior year on ~3% sales growth), capex $60–$75 million, cash conversion ~85%–95% (management cited ~90% conversion), YTD share buybacks 1.2% with repurchases paused for the year, net leverage 0.7x (pro forma ~1.7x including the Facet acquisition which adds ~$110M of sales and is expected to be accretive by year two).Donaldson Company Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
78
Positive
Cash Flow
71
Positive
| Breakdown | TTM | Jul 2025 | Jul 2024 | Jul 2023 | Jul 2022 | Jul 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.75B | 3.69B | 3.59B | 3.43B | 3.31B | 2.85B |
| Gross Profit | 1.29B | 1.29B | 1.27B | 1.16B | 1.07B | 971.70M |
| EBITDA | 626.30M | 615.90M | 655.10M | 580.20M | 547.60M | 489.30M |
| Net Income | 378.50M | 367.00M | 414.00M | 358.80M | 332.80M | 286.90M |
Balance Sheet | ||||||
| Total Assets | 3.06B | 2.98B | 2.91B | 2.77B | 2.60B | 2.40B |
| Cash, Cash Equivalents and Short-Term Investments | 194.40M | 180.40M | 232.70M | 187.10M | 193.30M | 222.80M |
| Total Debt | 680.80M | 730.20M | 598.20M | 655.70M | 692.80M | 527.60M |
| Total Liabilities | 1.49B | 1.52B | 1.43B | 1.45B | 1.47B | 1.26B |
| Stockholders Equity | 1.58B | 1.45B | 1.49B | 1.32B | 1.13B | 1.14B |
Cash Flow | ||||||
| Free Cash Flow | 349.70M | 339.90M | 406.90M | 426.40M | 167.70M | 343.60M |
| Operating Cash Flow | 413.90M | 418.80M | 492.50M | 544.50M | 252.80M | 401.90M |
| Investing Cash Flow | -53.70M | -150.40M | -86.90M | -327.30M | -154.00M | -58.30M |
| Financing Cash Flow | -364.70M | -321.70M | -355.90M | -222.20M | -114.20M | -363.30M |
Donaldson Company Technical Analysis
Neutral
88.65
Price Trends
94.85
Negative
93.59
Negative
85.44
Positive
Market Momentum
-1.43
Negative
50.53
Neutral
88.89
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DCI, the sentiment is Neutral. The current price of 88.65 is above the 20-day moving average (MA) of 85.64, below the 50-day MA of 94.85, and above the 200-day MA of 85.44, indicating a neutral trend. The MACD of -1.43 indicates Negative momentum. The RSI at 50.53 is Neutral, neither overbought nor oversold. The STOCH value of 88.89 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DCI.
Donaldson Company Risk Analysis
Donaldson Company disclosed 19 risk factors in its most recent earnings report. Donaldson Company reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Donaldson Company Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $10.09B | 27.54 | 17.82% | 0.70% | 4.18% | 16.05% | |
77 Outperform | $9.12B | 17.13 | 29.51% | 2.04% | -1.64% | -2.50% | |
76 Outperform | $10.77B | 30.59 | 13.29% | ― | 12.60% | 24.02% | |
70 Outperform | $10.27B | 31.85 | 25.19% | 1.28% | 2.37% | -6.93% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $13.85B | 36.68 | 4.18% | 0.97% | -4.99% | 22.16% | |
60 Neutral | $12.17B | 50.02 | 6.19% | ― | 5.52% | 9.03% |
* Industrials Sector Average
DCI
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Donaldson Company Corporate Events
Private Placements and Financing
Donaldson Company Secures New $400 Million Credit Facility
Positive
Apr 10, 2026
On April 8, 2026, Donaldson Company, Inc. entered into a three-year, unsecured, delayed draw term loan credit facility of $400 million with a syndicate of lenders led by Wells Fargo Bank as administrative agent. The facility, which had no borrowin...
Business Operations and StrategyM&A Transactions
Donaldson Company Announces $820 Million Facet Acquisition Deal
Positive
Feb 2, 2026
On January 31, 2026, Donaldson Company entered into a definitive Securities Purchase Agreement to acquire Filtration Group’s Facet Filtration business, which includes U.S. and European entities, in an all-cash transaction valued at approxima...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.