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Donaldson Company
(NYSE:DCI)
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Rating:75Outperform
Price Target:
$105.00
▲(12.67% Upside)
Action:Reiterated
Date:08/26/26
DCI scores well primarily on solid fundamentals (improving margins and strong free cash flow) and a constructive earnings outlook with FY27 growth and margin expansion guidance. The score is held back by only moderate valuation (P/E ~24.45 with ~1.33% yield) and a mixed near-term technical picture (neutral RSI and below the 20-day average), alongside higher absolute debt and acquisition-related interest/amortization pressures.
Positive Factors
Recurring aftermarket demand
Replacement filters create recurring demand over equipment life, while Facet expands this consumables base. This supports revenue visibility, customer retention and resilience beyond cyclical original-equipment sales.
Negative Factors
Slowing top-line growth
The longer-term revenue record is positive, but recent growth has slowed materially. A low current growth rate may constrain operating leverage and makes future expansion more dependent on acquisitions, pricing or cyclical recovery.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring aftermarket demand
Replacement filters create recurring demand over equipment life, while Facet expands this consumables base. This supports revenue visibility, customer retention and resilience beyond cyclical original-equipment sales.
Read all positive factors
Donaldson Company (DCI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.71B
Dividend Yield1.33%
Average Volume (3M)766.43K
Price to Earnings (P/E)24.5
Beta (1Y)0.77
Revenue Growth4.44%
EPS Growth25.08%
CountryUS
Employees15,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)3.92
Shares Outstanding115,911,060
10 Day Avg. Volume715,433
30 Day Avg. Volume766,430
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$95.67Price Target Upside2.66% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)4.39
Revenue Forecast (FY)$4.14B
Donaldson Company Business Overview & Revenue Model
Company Description
Donaldson Company, Inc. (DCI) is a filtration technology company that designs and manufactures filtration systems and replacement filters used to remove contaminants from air and liquids. The company serves a mix of industrial and mobile/off-road ...
How the Company Makes Money
Donaldson makes money primarily by selling filtration products and related systems through two broad types of revenue: (1) original equipment (first-fit) sales and (2) aftermarket/replacement (consumables) sales. Original equipment revenue comes f...
Donaldson Company Earnings Call Summary
Earnings Call Date:Aug 26, 2026
(Q4-2026)
| Next Earnings Date:Dec 02, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive outlook: management reported record fiscal 2026 results (sales, EPS, gross margin, and operating margin), strong Q4 momentum across mobile and life sciences, and confident FY27 guidance with expected revenue and margin expansion. The largest near-term negatives are acquisition-related costs (amortization and higher interest), transitional execution issues in power generation and certain industrial projects, and some organic softness in aerospace & defense. Management provided clear mitigation plans (plant ramp-ups, debt paydown, targeted synergies) and characterized most headwinds as temporary, supporting a constructive outlook.Positive Updates
Record Fiscal 2026 Results
Sales of $3.9 billion, a company record and a 5% increase versus fiscal 2025; full-year EPS grew ~8% to a record $3.98; operating margin expanded to a record 16%.
Negative Updates
Acquisition-Related Costs and Dilution
Non-GAAP adjustments in Q4 included pretax charges of $8.9 million (including $4.2M restructuring and $4.7M business development); Facet diluted Q4 EPS by ~$0.06 and is expected to dilute FY27 EPS by roughly $0.12 when including incremental amortization (~$22M) and interest expense.
Read all updates
Q4-2026 Updates
Positive
Negative
Record Fiscal 2026 Results
Sales of $3.9 billion, a company record and a 5% increase versus fiscal 2025; full-year EPS grew ~8% to a record $3.98; operating margin expanded to a record 16%.
Read all positive updates
Company Guidance
For fiscal 2027 Donaldson guided to total sales growth of 5.5%–9.5% (midpoint implying record sales above $4.1B and roughly +7.5% y/y), with Facet and pricing each contributing ~2 percentage points and currency about 1pp; segment outlooks were Mobile +2%–6% (off‑road mid‑single digits, on‑road high‑single digits, aftermarket mid‑single digits), Industrial total mid‑teens (about half of that from Facet) with IFS organic mid‑single digits and Aerospace & Defense >50% (organic mid‑teens), and Life Sciences +7%–11%. Profitability was guided to operating margin of 16.6%–17.2% (midpoint ≈ +90 bps), EPS $4.22–$4.38 (midpoint ≈ $4.30, ~8% y/y, including ≈$0.12 of Facet dilution), gross‑margin tailwinds offset by Facet run‑rate expenses and amortization (~$22M), and interest expense of $55–$60M (vs $36M prior year). Cash and capital priorities include capex $70–$90M, free cash conversion ~95%–105%, net leverage ~1.4x EBITDA after >$100M of Facet debt paydown, resumption of buybacks of ~1% of shares, continued dividend increases, and disciplined M&A; seasonality was noted with ~52% of sales and ~57% of operating profit expected in the second half.Donaldson Company Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
78
Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Jul 2025 | Jul 2024 | Jul 2023 | Jul 2022 | Jul 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.89B | 3.69B | 3.59B | 3.43B | 3.31B | 2.85B |
| Gross Profit | 1.35B | 1.29B | 1.27B | 1.16B | 1.07B | 971.70M |
| EBITDA | 689.80M | 615.90M | 655.10M | 580.20M | 547.60M | 489.30M |
| Net Income | 453.80M | 367.00M | 414.00M | 358.80M | 332.80M | 286.90M |
Balance Sheet | ||||||
| Total Assets | 3.99B | 2.98B | 2.91B | 2.77B | 2.60B | 2.40B |
| Cash, Cash Equivalents and Short-Term Investments | 250.40M | 180.40M | 232.70M | 187.10M | 193.30M | 222.80M |
| Total Debt | 1.32B | 668.30M | 598.20M | 655.70M | 692.80M | 527.60M |
| Total Liabilities | 2.22B | 1.52B | 1.43B | 1.45B | 1.47B | 1.26B |
| Stockholders Equity | 1.76B | 1.45B | 1.49B | 1.32B | 1.13B | 1.14B |
Cash Flow | ||||||
| Free Cash Flow | 441.20M | 339.90M | 406.90M | 426.40M | 167.70M | 343.60M |
| Operating Cash Flow | 493.70M | 418.80M | 492.50M | 544.50M | 252.80M | 401.90M |
| Investing Cash Flow | -42.20M | -150.40M | -86.90M | -327.30M | -154.00M | -58.30M |
| Financing Cash Flow | -232.30M | -321.70M | -355.90M | -222.20M | -114.20M | -363.30M |
Donaldson Company Technical Analysis
Positive
93.19
Price Trends
91.25
Positive
88.23
Positive
90.56
Positive
Market Momentum
0.43
Positive
49.53
Neutral
22.98
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 93.19 is below the 20-day moving average (MA) of 94.90, above the 50-day MA of 91.25, and above the 200-day MA of 90.56, indicating a neutral trend. The MACD of 0.43 indicates Positive momentum. The RSI at 49.53 is Neutral, neither overbought nor oversold. The STOCH value of 22.98 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 |
|---|---|---|---|---|---|---|---|
82 Outperform | $12.45B | 32.53 | 18.56% | 0.63% | 17.13% | 23.21% | |
79 Outperform | $10.06B | 35.68 | 12.37% | ― | 20.63% | 27.00% | |
75 Outperform | $10.71B | 24.45 | 28.13% | 1.31% | 4.44% | 25.08% | |
69 Neutral | $8.52B | 17.47 | 26.96% | 2.34% | 0.39% | -0.01% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
58 Neutral | $12.01B | 46.16 | 9.54% | ― | 0.61% | -27.77% | |
56 Neutral | $10.84B | 33.34 | 4.74% | 0.66% | 3.50% | 29.04% |
* Industrials Sector Average
DCI
Donaldson Company
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Donaldson Company Corporate Events
Business Operations and StrategyExecutive/Board Changes
Donaldson Company Announces Resignation of Longtime Board Director
Neutral
Jul 24, 2026
Donaldson Company, Inc., a leading industrial filtration manufacturer serving engine, industrial and environmental markets, continues to rely on a diversified portfolio of filtration products and technologies to support customers across multiple s...
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.