Donaldson (DCI)
NYSE:DCI
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Donaldson Company
(NYSE:DCI)
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Rating:71Outperform
Price Target:
$90.00
▲(0.90% Upside)
Action:Upgraded
Date:06/02/26
The score is driven primarily by strong financial quality (solid margins, improving leverage, and healthy free cash flow) and supportive guidance/positive earnings-call sentiment. These strengths are tempered by weak technicals (below key moving averages with negative MACD) and a relatively rich P/E with a modest dividend yield; the new credit facility is a smaller positive for flexibility.
Positive Factors
Recurring aftermarket and diversified channels
Donaldson's business model mixes OEM first-fit sales with a large recurring aftermarket of replacement filter elements. This installed-base driven consumable revenue creates durable, predictable demand, supporting steady revenue and margin stability over multiple years regardless of short-cycle equipment purchases.
Negative Factors
Industrial segment margin pressure from footprint changes
Near-term production shifts and plant closures are causing meaningful industrial gross-margin headwinds and one-time costs. If execution or ramp-up of receiving sites is slower than planned, margin recovery could be delayed, creating sustained pressure on segment profitability into fiscal 2027 and beyond.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring aftermarket and diversified channels
Donaldson's business model mixes OEM first-fit sales with a large recurring aftermarket of replacement filter elements. This installed-base driven consumable revenue creates durable, predictable demand, supporting steady revenue and margin stability over multiple years regardless of short-cycle equipment purchases.
Read all positive factors
Donaldson Company (DCI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.01B
Dividend Yield1.28%
Average Volume (3M)723.04K
Price to Earnings (P/E)22.8
Beta (1Y)0.74
Revenue Growth4.44%
EPS Growth25.08%
CountryUS
Employees14,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)3.78
Shares Outstanding115,911,060
10 Day Avg. Volume1,047,082
30 Day Avg. Volume723,037
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 Cap1.00
Enterprise Value/Revenue2.62
Enterprise Value/Gross Profit7.66
Enterprise Value/Ebitda14.36
Forecast
1Y Price Target
$92.33Price Target Upside3.51% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)3.95
Revenue Forecast (FY)$3.86B
Donaldson Company Business Overview & Revenue Model
Company Description
Donaldson Company, Inc. (DCI) is a global enterprise that develops, manufactures, and distributes an extensive range of filtration systems and their corresponding replacement parts. The company's operations are strategically divided into two core ...
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:Jun 02, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Sep 02, 2026
Earnings Call Sentiment Positive
The call reflected a largely positive tone: record quarterly sales, a company-high operating margin and EPS, strong performance in mobile solutions and life sciences, successful completion of the Facet acquisition, and clear runway for footprint-driven cost savings. These positives are tempered by temporary but meaningful industrial gross margin headwinds from production shifts and footprint costs, aerospace & defense supply-chain/timing issues, and near-term acquisition-related interest expense. Management communicated confidence in operational recovery by mid fiscal 2027 and reiterated disciplined capital allocation and backlog-driven demand, so the highlights materially outweigh the lowlights.Positive Updates
Record quarterly performance
Total sales increased 6% year-over-year to a record quarter (approximately $995 million reported in the quarter); adjusted EPS was $1.06, up 7% versus FY25; adjusted operating margin was a record 16.6%, up 30 basis points year-over-year and 260 basis points sequentially from Q2.
Negative Updates
Industrial segment gross margin and pretax margin pressure
Industrial solutions sales were $282 million, down 1% year-over-year. Industrial pretax margin declined to 13.4% versus 18.1% prior year (down ~470 basis points) driven by gross margin headwinds from short-term operating inefficiencies, production shifts to Mexico for large turbine systems (~80 basis points impact), and footprint optimization costs.
Read all updates
Q3-2026 Updates
Positive
Negative
Record quarterly performance
Total sales increased 6% year-over-year to a record quarter (approximately $995 million reported in the quarter); adjusted EPS was $1.06, up 7% versus FY25; adjusted operating margin was a record 16.6%, up 30 basis points year-over-year and 260 basis points sequentially from Q2.
Read all positive updates
Company Guidance
Management updated fiscal 2026 guidance: consolidated organic sales +3.0% to +5.0% (pricing and FX each contributing a little >1%), with Mobile Solutions +3.5%–+5.5%, Industrial Solutions flat to +2% (IFS low‑single‑digit growth, Aerospace & Defense down mid‑single‑digits), and Life Sciences +9%–+11% (raised from prior 5%–9%); organic operating margin 15.8%–16.2% (implying full‑year expansion of ~10–50 bps) and full‑year pretax margin mid‑to‑high single digits, adjusted EPS excluding Facet $3.94–$4.01 (midpoint ≈ +8% YoY), capex $60M–$75M, cash conversion 85%–95%, and pro forma net debt/EBITDA ≈1.8x including Facet; Facet will add ~$25M–$30M of Q4 sales (~70–80 bps to full‑year growth), ~ $9M of interest and ~ $0.03 EPS dilution in Q4 (immaterial operating‑margin impact this year), with ~ $4–5M of expected procurement synergies and GAAP accretion by year two.Donaldson Company Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
78
Positive
Cash Flow
80
Positive
| Breakdown | TTM | Jul 2025 | Jul 2024 | Jul 2023 | Jul 2022 | Jul 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.81B | 3.69B | 3.59B | 3.43B | 3.31B | 2.85B |
| Gross Profit | 1.30B | 1.29B | 1.27B | 1.16B | 1.07B | 971.70M |
| EBITDA | 694.40M | 615.90M | 655.10M | 580.20M | 547.60M | 489.30M |
| Net Income | 438.80M | 367.00M | 414.00M | 358.80M | 332.80M | 286.90M |
Balance Sheet | ||||||
| Total Assets | 3.09B | 2.98B | 2.91B | 2.77B | 2.60B | 2.40B |
| Cash, Cash Equivalents and Short-Term Investments | 204.10M | 180.40M | 232.70M | 187.10M | 193.30M | 222.80M |
| Total Debt | 601.90M | 730.20M | 598.20M | 655.70M | 692.80M | 527.60M |
| Total Liabilities | 1.39B | 1.52B | 1.43B | 1.45B | 1.47B | 1.26B |
| Stockholders Equity | 1.70B | 1.45B | 1.49B | 1.32B | 1.13B | 1.14B |
Cash Flow | ||||||
| Free Cash Flow | 388.80M | 339.90M | 406.90M | 426.40M | 167.70M | 343.60M |
| Operating Cash Flow | 461.60M | 418.80M | 492.50M | 544.50M | 252.80M | 401.90M |
| Investing Cash Flow | -62.80M | -150.40M | -86.90M | -327.30M | -154.00M | -58.30M |
| Financing Cash Flow | -378.60M | -321.70M | -355.90M | -222.20M | -114.20M | -363.30M |
Donaldson Company Technical Analysis
Positive
89.20
Price Trends
85.52
Positive
90.68
Negative
88.28
Negative
Market Momentum
0.09
Negative
56.18
Neutral
68.86
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 89.2 is above the 20-day moving average (MA) of 83.67, above the 50-day MA of 85.52, and above the 200-day MA of 88.28, indicating a neutral trend. The MACD of 0.09 indicates Negative momentum. The RSI at 56.18 is Neutral, neither overbought nor oversold. The STOCH value of 68.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $11.12B | 30.47 | 18.38% | 0.70% | 14.22% | 25.22% | |
72 Outperform | $8.14B | 15.83 | 28.42% | 2.04% | 0.23% | 4.76% | |
72 Outperform | $11.52B | 45.55 | 12.67% | ― | 17.39% | 20.78% | |
71 Outperform | $10.01B | 22.83 | 25.19% | 1.28% | 4.44% | 25.08% | |
68 Neutral | $15.44B | 83.49 | 7.18% | ― | -0.51% | -44.42% | |
64 Neutral | $14.13B | 50.78 | 4.23% | 0.97% | 1.54% | 22.59% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
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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...
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.