Donaldson Company (DCI) AI Stock Analysis

• Market Cap: $8.81B
• Dividend Yield: 1.39%
• Average Volume (3M): 532.34K
• Price to Earnings (P/E): 25.3
• Beta (1Y): 0.86
• Revenue Growth: 2.92%
• EPS Growth: -9.78%
• Country: US
• Employees: 14,000
• Sector: Industrials
• Sector Strength: 76
• Industry: Industrial - Machinery
• EPS (TTM): 1.03
• Shares Outstanding: 116,519,940
• 10 Day Avg. Volume: 643,531
• 30 Day Avg. Volume: 532,340
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.02
• Enterprise Value/Revenue: 2.47
• Enterprise Value/Gross Profit: 7.01
• Enterprise Value/Ebitda: 14.87
• 1Y Price Target: $72.00
• Price Target Upside: -12.34% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 77 Outperform
• Price Target: $93.00 ▲(13.22% Upside)

Donaldson Company scores well due to its strong financial performance and positive earnings call outlook, which highlight robust growth and strategic initiatives. Technical analysis suggests overbought conditions, and valuation metrics indicate potential overvaluation. Recent corporate events further bolster the company's strategic position.

Positive Factors

Dividend Increase

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

Shareholder Returns

The company's accelerated stock repurchases are now anticipated to be 3.5%-4.0% of shares outstanding, up from 2%-3% previously.

Negative Factors

Impairment Charges

The Life Sciences growth strategy continues to weigh on performance as evidenced by a $62M impairment charge taken during the quarter related to two bioprocessing businesses as well as a one-time earn out reversal.

Revenue Decline

Revenue of $870 million declined 1% year-over-year.

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 a strong financial profile with consistent revenue growth, stable profit margins, and a solid balance sheet. The company maintains manageable leverage and effectively uses equity, despite challenges in sustaining profitability, as indicated by declining net profit margin and ROE. Cash flow remains positive, supporting operational flexibility.

Income Statement

Donaldson Company demonstrates strong financial performance with a consistent revenue growth rate, evidenced by a 10.2% increase from 2023 to TTM 2025. The gross profit margin stands at 35.2% for TTM 2025, showing stability in profitability. However, a slight decline in net profit margin from 11.5% in 2024 to 9.9% in TTM 2025 suggests pressure on net earnings. Overall, robust revenue growth and solid margins contribute positively to the score.

Balance Sheet

The balance sheet reflects a stable financial position, with a debt-to-equity ratio of 0.49 in TTM 2025, indicating manageable leverage. The equity ratio of 48.9% suggests a strong capitalization structure. Return on equity decreased to 24.8% in TTM 2025 from 27.8% in 2024, which still indicates efficient use of equity. While the balance sheet is strong, the declining ROE indicates room for improvement.

Cash Flow

The company's cash flow statement shows a positive trajectory with a free cash flow growth rate of -26.6% from 2024 to TTM 2025, reflecting a decrease in free cash flow due to higher capital expenditure. The operating cash flow to net income ratio of 1.04 in TTM 2025 indicates sufficient cash generation relative to net income, supporting operational needs despite fluctuations in free cash flow.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.59B	3.43B	3.31B	2.85B	2.58B
Gross Profit	1.27B	1.16B	1.07B	971.70M	871.60M
EBITDA	655.10M	580.20M	547.60M	489.30M	440.20M
Net Income	414.00M	358.80M	332.80M	286.90M	257.00M
Balance Sheet
Total Assets	2.91B	2.77B	2.60B	2.40B	2.24B
Cash, Cash Equivalents and Short-Term Investments	232.70M	187.10M	193.30M	222.80M	236.60M
Total Debt	536.70M	655.70M	648.00M	527.60M	700.70M
Total Liabilities	1.43B	1.45B	1.47B	1.26B	1.25B
Stockholders Equity	1.49B	1.32B	1.13B	1.14B	992.90M
Cash Flow
Free Cash Flow	406.90M	426.40M	167.70M	343.60M	264.60M
Operating Cash Flow	492.50M	544.50M	252.80M	401.90M	387.00M
Investing Cash Flow	-86.90M	-327.30M	-154.00M	-58.30M	-128.90M
Financing Cash Flow	-355.90M	-222.20M	-114.20M	-363.30M	-199.50M

Donaldson Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 82.14
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 82.14 is above the 20-day moving average (MA) of 73.82, above the 50-day MA of 71.59, and above the 200-day MA of 69.43, indicating a bullish trend. The MACD of 1.73 indicates Negative momentum. The RSI at 78.71 is Negative, neither overbought nor oversold. The STOCH value of 79.07 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	79 Outperform	$13.44B	26.68	20.17%	0.77%	6.69%	21.44%
WTS	79 Outperform	$9.44B	30.22	17.75%	0.64%	2.96%	12.62%
DCI	77 Outperform	$8.81B	25.30	24.94%	1.39%	2.92%	-9.78%
AOS	76 Outperform	$10.14B	20.23	27.60%	1.88%	-3.53%	-7.46%
MWA	75 Outperform	$4.24B	28.39	17.33%	0.98%	10.19%	20.71%
RRX	67 Neutral	$10.04B	40.68	3.84%	0.92%	-7.88%	―
Sector *	64 Neutral	$10.95B	16.37	8.81%	1.96%	2.68%	-15.33%

Donaldson Company Corporate Events

Donaldson Company Amends Credit Agreement, Boosts Financial Flexibility

On June 12, 2025, Donaldson Company, Inc. amended its existing Credit Agreement to extend the maturity date of its revolving credit facility to June 12, 2030, and increased its credit limit to $600 million. The amendment also introduced a new $200 million term loan facility, which was fully advanced on the closing date, and increased the incremental credit facility option to $350 million. These changes are expected to enhance the company’s financial flexibility and support its strategic initiatives.

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.