Graco (GGG) AI Stock Analysis

• Market Cap: $15.29B
• Dividend Yield: 1.32%
• Average Volume (3M): 1.09M
• Price to Earnings (P/E): 26.6
• Beta (1Y): 0.73
• Revenue Growth: 2.85%
• EPS Growth: 3.09%
• Country: US
• Employees: 4,300
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 0.77
• Shares Outstanding: 165,338,300
• 10 Day Avg. Volume: 923,393
• 30 Day Avg. Volume: 1,090,187
• PEG Ratio: 2.95
• Price to Book (P/B): 5.23
• Price to Sales (P/S): 6.20
• P/FCF Ratio: 21.75
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 6.52
• Enterprise Value/Gross Profit: 12.42
• Enterprise Value/Ebitda: 19.39
• 1Y Price Target: $93.67
• Price Target Upside: 0.80% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6
• EPS Forecast (FY): 3.18
• Revenue Forecast (FY): $2.37B

• Rating: 82 Outperform
• Price Target: $109.00 ▲(17.29% Upside)
• Action: Reiterated Date: 03/03/26
• Date: Action: Reiterated 03/03/26

The score is driven primarily by Graco’s strong financial profile (high margins, minimal leverage, and robust cash generation). Technicals are supportive with an established uptrend. The key offsets are a relatively expensive valuation (P/E ~30.5) and a cautious near-term growth outlook highlighted in guidance and call risks (tariffs, regional softness, and revenue lumpiness).

Positive Factors

High Profitability

Sustained high gross and net margins indicate durable pricing power and cost structure advantages across cycles. This margin profile supports consistent operating cash flow, funds reinvestment and shareholder returns, and cushions earnings against moderate demand downturns.

Very Conservative Balance Sheet

Minimal debt and a strong equity base give the company financial flexibility to fund capex, tuck-in M&A, and buybacks without increasing financial risk. Healthy ROE alongside low leverage supports sustainable returns and resilience to macro shocks.

Strong Cash Generation & Strategic M&A

Robust operating cash flow funds acquisitions, dividends and buybacks while limiting external financing needs. Recent M&A enlarged addressable markets and product lines, and One Graco inventory/efficiency gains improved working capital and margins long-term.

Negative Factors

Uneven, Modest Top-Line Growth

Top-line momentum has been inconsistent, with a prior-year decline and only modest TTM growth. Structural lumpy demand in project-driven end markets suggests revenue may remain uneven, limiting predictable scaling of earnings over the medium term.

Tariff & Cost Headwinds

Trade-driven cost increases have meaningfully compressed gross margins and demonstrate exposure to policy and supply-chain shifts. Persistent or escalating tariffs could structurally raise product costs and reduce competitive flexibility on pricing.

Revenue Volatility from Lumpy Licensing and Projects

Dependence on one-time license fees and lengthy project-based backlog conversions creates inherent revenue timing uncertainty. Combined with regional softness (notably China) this amplifies forecasting risk and can produce persistent quarter-to-quarter revenue volatility.

Graco Business Overview & Revenue Model

Company Description

Graco Inc. designs, manufactures, and markets systems and equipment used to move, measure, control, dispense, and spray fluid and powder materials worldwide. The company's Industrial segment offers proportioning systems to spray polyurethane foam and polyurea coatings; equipment that pumps, meters, mixes and dispenses sealant, adhesive, and composite materials; and gel-coat equipment, chop and wet-out systems, resin transfer molding systems and applicators, and precision dispensing solutions. It also provides liquid finishing equipment; paint circulating and supply pumps; paint circulating advanced control systems; plural component coating proportioners; spare parts and accessories; and powder finishing products to coat powder finishing on metals under the Gema and SAT brands. The company's Process segment offers pumps to move and dispense chemicals, water, wastewater, petroleum, food, lubricants, and other fluids; pressure valves used in the oil and natural gas industry, other industrial processes, and research facilities; and chemical injection pumping solutions for injection of chemicals into producing oil wells and pipelines. It also supplies pumps, hose reels, meters, valves, and accessories for fast oil change facilities, service garages, fleet service centers, automobile dealerships, auto parts stores, truck builders, and heavy equipment service centers; and systems, components, and accessories for the automatic lubrication of bearings, gears, and generators in industrial and commercial equipment, compressors, turbines, and on- and off-road vehicles. The company's Contractor segment offers sprayers to apply paint to walls and other structures; and viscous coatings to roofs, as well as markings on roads, parking lots, athletic fields, and floors. It sells its products through distributors, original equipment manufacturers, and home center channels; and directly to end-users. The company was incorporated in 1926 and is headquartered in Minneapolis, Minnesota.

How the Company Makes Money

Graco generates revenue through the sale of its extensive range of products across various sectors, including construction, automotive, and industrial. The company's revenue model is primarily based on direct sales to customers, distributors, and retailers, with a significant portion coming from aftermarket sales of replacement parts and accessories. Key revenue streams include the sale of fluid handling equipment, spray equipment, and lubrication systems. Graco also benefits from strategic partnerships with industry leaders and distributors, enhancing its market reach and reinforcing its brand presence. Additionally, the company invests in research and development to innovate and expand its product offerings, which contributes to sustained revenue growth.

Graco Financial Statement Overview

Summary

Strong overall fundamentals: high profitability (TTM gross margin ~52%, net margin ~23%), very conservative balance sheet (debt-to-equity ~0.02), and high-quality cash generation (operating cash flow > net income; free cash flow close to net income). The main constraint is uneven and modest recent revenue growth (2024 decline followed by ~2% TTM growth).

Income Statement

Profitability is a standout: TTM (Trailing-Twelve-Months) gross margin (~52%) and net margin (~23%) remain strong, with operating profitability also holding near the high end of its multi-year range. Revenue growth is modest in TTM (about +2%) after a decline in 2024, suggesting a slower growth profile and some demand variability. Overall, earnings power is very solid, but top-line momentum is not consistently strong year to year.

Balance Sheet

The balance sheet is very conservatively structured with extremely low leverage (TTM debt-to-equity ~0.02) and a large equity base relative to assets. Returns on equity remain healthy (~19–25% across the period; ~20% in TTM), indicating strong profitability without relying on debt. The main watch item is that ROE has eased from prior-year peaks, but financial risk remains low given minimal debt.

Cash Flow

Cash generation is strong and high quality: TTM (Trailing-Twelve-Months) operating cash flow exceeds net income (coverage ~1.44) and free cash flow is close to net income (~0.93), supporting durability of reported earnings. Free cash flow rebounded materially versus 2024 and is far above the softer 2022 level, though historical volatility (notably the 2022 drop) is a reminder that cash conversion can fluctuate.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.24B	2.11B	2.20B	2.14B	1.99B
Gross Profit	1.17B	1.12B	1.16B	1.06B	1.03B
EBITDA	751.53M	678.86M	686.59M	641.62M	578.00M
Net Income	521.84M	486.08M	506.51M	460.64M	439.87M
Balance Sheet
Total Assets	3.27B	3.14B	2.72B	2.44B	2.44B
Cash, Cash Equivalents and Short-Term Investments	624.08M	675.34M	537.95M	339.20M	624.30M
Total Debt	60.96M	48.65M	50.06M	126.59M	226.11M
Total Liabilities	620.34M	555.08M	497.78M	579.25M	733.86M
Stockholders Equity	2.65B	2.58B	2.22B	1.86B	1.71B
Cash Flow
Free Cash Flow	637.92M	514.96M	466.24M	176.23M	323.33M
Operating Cash Flow	683.59M	621.70M	651.02M	377.39M	456.90M
Investing Cash Flow	-172.80M	-342.81M	-185.27M	-226.82M	-153.30M
Financing Cash Flow	-576.05M	-139.86M	-268.01M	-434.40M	-57.14M

Graco Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 92.93
• 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 GGG, the sentiment is Neutral. The current price of 92.93 is below the 20-day moving average (MA) of 93.34, above the 50-day MA of 88.50, and above the 200-day MA of 84.84, indicating a neutral trend. The MACD of 1.32 indicates Positive momentum. The RSI at 56.02 is Neutral, neither overbought nor oversold. The STOCH value of 62.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GGG.

Graco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GGG	82 Outperform	$15.29B	26.59	19.92%	1.32%	2.85%	3.09%
ITT	78 Outperform	$16.56B	28.23	17.85%	0.79%	8.01%	2.67%
IEX	77 Outperform	$15.52B	25.94	12.35%	1.56%	7.09%	-2.29%
NDSN	74 Outperform	$16.09B	28.71	17.47%	1.64%	3.78%	4.85%
CR	65 Neutral	$11.74B	28.93	18.09%	0.49%	-0.37%	21.77%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
GNRC	60 Neutral	$12.96B	50.02	6.22%	―	5.52%	9.03%

Graco Corporate Events

Graco Appoints Sanjiv Gupta as New Chief Financial Officer

On March 2, 2026, Graco Inc. announced that Sanjiv Gupta will become Chief Financial Officer and Treasurer effective April 15, 2026, succeeding long-time executive David M. Lowe, who plans to retire after more than three decades with the company. Lowe, who has served as CFO and Treasurer since June 2021, will remain in a non-executive capacity through May 2026 to ensure a smooth handover.

Gupta, 52, joins from General Motors, where he held senior finance and operational roles including Vice President & Chief Financial Officer, GM International, and previously led corporate financial planning and analysis and regional businesses in India, Southeast Asia and Australia. Graco’s CEO highlighted Gupta’s deep experience in manufacturing, corporate finance and global operations as a catalyst to accelerate the company’s top-line growth strategies.

To secure Gupta’s move, Graco has approved a compensation package featuring a $575,000 annual base salary, a target bonus equal to 75% of salary for 2026, a $65,000 cash sign-on bonus subject to a one-year clawback, and substantial equity-based awards, including stock options and restricted stock units. The equity grants are structured to replace forfeited GM awards and to vest over multiple years, aligning Gupta’s incentives with long-term shareholder value and signaling the importance of his role in Graco’s next phase of growth.

The most recent analyst rating on (GGG) stock is a Hold with a $85.00 price target. To see the full list of analyst forecasts on Graco stock, see the GGG Stock Forecast page.

Graco Director Brett Carter Resigns From Company Board

Graco Inc. announced that director Brett C. Carter notified its board on February 12, 2026, of his decision to resign from the board effective February 13, 2026. Carter, who served on the Audit Committee and the Management Organization and Compensation Committee and whose term was scheduled to run until the 2027 annual meeting, stated that his departure was not due to any disagreement with management or the board but to pursue other commitments.

The resignation removes an experienced voice from two key oversight committees, requiring Graco to adjust its board and committee composition ahead of the originally expected end of his term. While the company emphasized the absence of conflict surrounding his exit, investors and governance watchers may focus on how swiftly and with what profile of candidate Graco fills the resulting board and committee vacancies.

The most recent analyst rating on (GGG) stock is a Hold with a $85.00 price target. To see the full list of analyst forecasts on Graco stock, see the GGG Stock Forecast page.