Donaldson Company (DCI) AI Stock Analysis

• Market Cap: $10.16B
• Dividend Yield: 1.3%
• Average Volume (3M): 576.03K
• Price to Earnings (P/E): 28.8
• Beta (1Y): 0.80
• Revenue Growth: 2.92%
• EPS Growth: -9.78%
• Country: US
• Employees: 14,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 1.03
• Shares Outstanding: 115,907,360
• 10 Day Avg. Volume: 560,921
• 30 Day Avg. Volume: 576,026
• PEG Ratio: -2.35
• Price to Book (P/B): 5.88
• Price to Sales (P/S): 2.31
• P/FCF Ratio: 25.13
• Enterprise Value/Market Cap: 0.89
• Enterprise Value/Revenue: 2.45
• Enterprise Value/Gross Profit: 7.04
• Enterprise Value/Ebitda: 14.69
• 1Y Price Target: $86.33
• Price Target Upside: -1.54% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 78 Outperform
• Price Target: $91.00 ▲(3.79% Upside)

Donaldson Company's strong financial performance and positive earnings call guidance are the most significant factors contributing to the score. The technical analysis indicates a strong upward trend, although the stock is currently overbought. The valuation suggests the stock is overvalued, which slightly offsets the positive outlook.

Positive Factors

Revenue Growth

Donaldson's ability to exceed revenue expectations demonstrates strong market demand and effective sales strategies, indicating robust business health.

Strategic Partnerships

New partnerships can enhance distribution channels and market reach, supporting long-term revenue growth and competitive positioning.

Financial Flexibility

Enhanced credit facilities provide Donaldson with greater financial flexibility to pursue strategic initiatives and manage economic fluctuations.

Negative Factors

Declining Profit Margins

Decreasing profit margins due to higher manufacturing costs can erode profitability, posing challenges to sustaining long-term earnings growth.

Impairment Charges

Significant impairment charges indicate potential missteps in investments or market challenges, impacting financial performance and strategic focus.

Decline in Specific Segments

Weakness in key segments like transportation and agriculture can hinder overall growth, requiring strategic adjustments to mitigate impact.

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 generates revenue primarily through the sale of its filtration products and systems. The company operates in two main segments: Engine Products and Industrial Filtration Solutions. The Engine Products segment focuses on products used in the transportation and power generation industries, while the Industrial Filtration Solutions segment serves manufacturing and process industries. Key revenue streams include direct sales to original equipment manufacturers (OEMs), aftermarket sales, and service contracts. Additionally, Donaldson benefits from significant partnerships with leading equipment manufacturers, enhancing its market presence and driving sales. The company's commitment to innovation and sustainability also positions it well to capitalize on growing environmental regulations and the demand for cleaner technologies, thereby contributing to its overall earnings.

Donaldson Company Financial Statement Overview

Summary

Donaldson Company exhibits strong financial health with consistent revenue growth and profitability. The balance sheet shows improved leverage and stable capital structure, while cash flows indicate robust cash generation. Despite some margin compression and efficiency challenges, the company's financial position remains solid, supporting its growth trajectory in the industrial machinery sector.

Income Statement

Donaldson Company has demonstrated consistent revenue growth over the years, with a notable increase in gross profit margin from 32.28% in 2022 to 34.85% in 2025. The net profit margin, although slightly decreased from 11.54% in 2024 to 9.94% in 2025, remains strong. The EBIT and EBITDA margins have slightly decreased, indicating some pressure on operational efficiency. Overall, the company shows robust revenue growth and profitability, albeit with some margin compression.

Balance Sheet

The company's debt-to-equity ratio has improved from 0.57 in 2022 to 0.46 in 2025, indicating better leverage management. Return on equity has decreased from 27.80% in 2024 to 25.25% in 2025, suggesting a slight decline in profitability relative to equity. The equity ratio remains stable, reflecting a balanced capital structure. Overall, the balance sheet shows stability with improved leverage but slightly reduced profitability.

Cash Flow

Donaldson Company has shown a positive free cash flow growth rate of 13.83% in 2025, recovering from a decline in 2024. The operating cash flow to net income ratio has decreased, indicating a lower cash conversion efficiency. However, the free cash flow to net income ratio remains strong at 81.16%, suggesting healthy cash generation relative to profits. Overall, the cash flow statement reflects strong cash generation with some efficiency challenges.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.69B	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	615.90M	615.90M	655.10M	580.20M	547.60M	489.30M
Net Income	367.00M	367.00M	414.00M	358.80M	332.80M	286.90M
Balance Sheet
Total Assets	2.98B	2.98B	2.91B	2.77B	2.60B	2.40B
Cash, Cash Equivalents and Short-Term Investments	180.40M	180.40M	232.70M	187.10M	193.30M	222.80M
Total Debt	661.60M	668.30M	598.20M	655.70M	692.80M	527.60M
Total Liabilities	1.52B	1.52B	1.43B	1.45B	1.47B	1.26B
Stockholders Equity	1.45B	1.45B	1.49B	1.32B	1.13B	1.14B
Cash Flow
Free Cash Flow	339.90M	339.90M	406.90M	426.40M	167.70M	343.60M
Operating Cash Flow	418.80M	418.80M	492.50M	544.50M	252.80M	401.90M
Investing Cash Flow	-150.40M	-150.40M	-86.90M	-327.30M	-154.00M	-58.30M
Financing Cash Flow	-321.70M	-321.70M	-355.90M	-222.20M	-114.20M	-363.30M

Donaldson Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 87.68
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 87.68 is above the 20-day moving average (MA) of 85.50, above the 50-day MA of 83.30, and above the 200-day MA of 73.02, indicating a bullish trend. The MACD of 0.91 indicates Positive momentum. The RSI at 63.89 is Neutral, neither overbought nor oversold. The STOCH value of 39.70 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
DCI	78 Outperform	$10.16B	28.76	24.94%	1.30%	2.92%	-9.78%
SPXC	75 Outperform	$10.19B	43.64	12.76%	―	12.60%	24.02%
WTS	73 Outperform	$9.09B	28.12	17.81%	0.70%	4.18%	16.05%
AOS	70 Outperform	$9.06B	17.58	28.21%	2.12%	-1.64%	-2.50%
RRX	69 Neutral	$9.12B	35.52	3.89%	0.99%	-4.99%	22.16%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
GNRC	59 Neutral	$8.57B	27.80	12.38%	―	5.52%	9.03%

Donaldson Company Corporate Events

Donaldson’s Global Supply Chain at Risk: How Tariffs Threaten Financial Stability

Donaldson faces significant business risks due to potential new or incremental tariffs, which could disrupt existing supply chains and increase operational costs. These tariffs may lead to retaliatory measures from other countries, making Donaldson’s products more expensive and less competitive in the global market. The implementation of substantial tariffs on imports to the United States from regions like Mexico, China, and the EU could severely impact the company’s supply chain and financial performance. Consequently, changes in international trade policy pose a threat to Donaldson’s operations, financial condition, and cash flows due to its extensive international presence.

Donaldson’s Record Year and Optimistic 2026 Outlook

Donaldson Company recently held its earnings call, revealing a strong financial performance for fiscal 2025, characterized by record sales and profit margins. The overall sentiment was positive, with optimism for fiscal 2026 despite facing certain challenges. The company reported impressive results in its mobile and industrial solutions segments, although it acknowledged some hurdles such as declining on-road sales and tariff-related inflation impacts.

Donaldson Company Reports Record Sales and Earnings

Donaldson Company, Inc. is a global leader in technology-led filtration products and solutions, serving a broad range of industries through its Mobile Solutions, Industrial Solutions, and Life Sciences segments.