Donaldson Company (DCI) AI Stock Analysis

• Market Cap: $8.44B
• Dividend Yield: 1.57%
• Average Volume (3M): 503.46K
• Price to Earnings (P/E): 24.3
• Beta (1Y): 0.86
• Revenue Growth: 3.26%
• EPS Growth: -7.70%
• Country: US
• Employees: 14,000
• Sector: Industrials
• Sector Strength: 84
• Industry: Industrial - Machinery
• EPS (TTM): 0.99
• Shares Outstanding: 116,519,940
• 10 Day Avg. Volume: 503,754
• 30 Day Avg. Volume: 503,465
• 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: 1.00
• Enterprise Value/Revenue: 2.32
• Enterprise Value/Gross Profit: 6.59
• Enterprise Value/Ebitda: 13.99
• 1Y Price Target: $72.00
• Price Target Upside: -0.58% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 77 Outperform
• Price Target: $78.00 ▲(7.71% Upside)

Donaldson Company is a solid performer with strong financial health and positive corporate developments. The robust earnings and strategic corporate actions offset some challenges in profitability and valuation, resulting in an overall favorable stock score. Technical analysis suggests potential for a rebound, further supporting a positive outlook.

Positive Factors

Earnings

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

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

Core Business Challenges

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

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 Performance

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

Donaldson Company Business Overview & Revenue Model

Company Description

Donaldson Company, Inc. (DCI) is a leading global manufacturer of filtration systems and replacement parts. Serving diverse markets, including industrial, aerospace, and automotive sectors, the company offers a broad range of filtration solutions designed to enhance equipment performance and efficiency. Core products include air and liquid filtration systems, hydraulic filters, and exhaust and emission control products. Donaldson's innovative technologies and commitment to quality have established it as a trusted partner for clients worldwide.

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 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: 72.42
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 72.42 is above the 20-day moving average (MA) of 71.18, above the 50-day MA of 70.15, and above the 200-day MA of 69.64, indicating a bullish trend. The MACD of 0.56 indicates Negative momentum. The RSI at 60.54 is Neutral, neither overbought nor oversold. The STOCH value of 63.53 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	$12.96B	26.24	20.17%	0.82%	6.69%	21.44%
WTS	78 Outperform	$8.80B	30.20	17.61%	0.70%	3.89%	8.17%
DCI	77 Outperform	$8.44B	24.32	24.58%	1.57%	3.26%	-7.70%
AOS	76 Outperform	$9.85B	19.62	27.60%	1.93%	-3.53%	-7.46%
MWA	75 Outperform	$3.95B	25.28	17.33%	1.09%	10.19%	20.71%
RRX	65 Neutral	$0.00	42.02	3.69%	0.96%	-7.88%	―
Sector *	60 Neutral	kr41.58B	12.28	-0.40%	2.20%	1.33%	-2.77%

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.

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 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.