Graco Inc (GGG)
NYSE:GGG
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Graco
(NYSE:GGG)
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Rating:67Neutral
Price Target:
$85.00
▼(-2.01% Downside)
Action:Downgraded
Date:05/06/26
Overall score reflects strong financial quality (high margins, conservative balance sheet, solid cash generation) offset by notably weak technical momentum (below key moving averages with bearish MACD/RSI) and a relatively expensive valuation (P/E ~29). Earnings call was mixed: guidance held and bookings/backlog improved, but near-term organic weakness, margin compression, and tariff costs limit upside.
Positive Factors
High Profitability
Graco's very high and sustained margins reflect premium product positioning, pricing power and a profitable installed-base business. Durable margin structure supports strong returns on capital, funds reinvestment and shareholder distributions even through moderate end-market cycles.
Negative Factors
Organic Demand Weakness
Sustained organic declines across segments signal structural softness in end markets rather than transitory order timing. If contractor and industrial demand remains muted, revenue growth will rely more on acquisitions and backlog conversion, increasing execution risk over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
High Profitability
Graco's very high and sustained margins reflect premium product positioning, pricing power and a profitable installed-base business. Durable margin structure supports strong returns on capital, funds reinvestment and shareholder distributions even through moderate end-market cycles.
Read all positive factors
Graco Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where Graco is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where Graco is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyGraco (GGG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.64B
Dividend Yield1.32%
Average Volume (3M)1.37M
Price to Earnings (P/E)29.2
Beta (1Y)0.74
Revenue Growth4.61%
EPS Growth7.87%
CountryUS
Employees4,300
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)3.12
Shares Outstanding165,968,170
10 Day Avg. Volume1,576,122
30 Day Avg. Volume1,371,247
Financial Highlights & Ratios
PEG Ratio2.95
Price to Book (P/B)5.23
Price to Sales (P/S)6.20
P/FCF Ratio21.75
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue5.26
Enterprise Value/Gross Profit10.06
Enterprise Value/Ebitda16.54
Forecast
1Y Price Target
$91.00Price Target Upside4.91% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)3.13
Revenue Forecast (FY)$2.36B
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 ...
How the Company Makes Money
Graco primarily makes money by selling engineered fluid-handling equipment and systems (capital equipment) and the related accessories and replacement parts required to operate and maintain that installed base. Its revenue is largely generated fro...
Graco Earnings Call Summary
Earnings Call Date:Apr 22, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Neutral
The call presented a mix of positive operational indicators (bookings growth, backlog expansion, strong semiconductor bookings, maintained full-year guidance, healthy cash generation and an active M&A pipeline) alongside material near-term headwinds (6% organic revenue decline, EPS down 6%, gross margin compression, tariff-related costs and a slow start with timing-related backlog conversion). Management emphasized confidence in demand momentum, backlog conversion and disciplined capital allocation, but underlying organic weakness—especially in contractor/construction end markets—and margin pressure temper the tone.Positive Updates
Total Sales Growth with Acquisition and Currency Support
Reported first quarter sales of $540 million, up 2% year-over-year; growth composition: acquisitions +5%, currency translation +3%, offset by organic sales -6%.
Negative Updates
Organic Revenue Decline
Organic sales declined 6% company-wide in the quarter; by segment organic declines were Contractor -4%, Industrial -8% and Expansion Markets -5%, indicating continuing pressure in underlying demand.
Read all updates
Q1-2026 Updates
Positive
Negative
Total Sales Growth with Acquisition and Currency Support
Reported first quarter sales of $540 million, up 2% year-over-year; growth composition: acquisitions +5%, currency translation +3%, offset by organic sales -6%.
Read all positive updates
Company Guidance
Management reaffirmed 2026 revenue guidance of low‑single‑digit organic growth (constant currency) and mid‑single‑digit growth including acquisitions, and said current exchange rates (assuming similar volume/mix) should be ~+1% to net sales and ~+2% to net earnings; they expect a full‑year adjusted effective tax rate of ~20–21%, unallocated corporate expenses of $40–$43M, and capital expenditures of $90–$100M (about $50M for facility expansions). On the Q1 results they reported sales of $540M (+2% y/y: acquisitions +5%, FX +3%, organic −6%), reported net earnings $119M (−5%, $0.70/sh) and adjusted EPS $0.66 (−6%), gross margin down 60 bps, tariffs added ~$7M of product cost, cash from operations $120M (down $5M; 107% of adjusted net earnings), and YTD uses including 189k shares repurchased for $16M, dividends $49M, capex $12M and $40M of share issuances. Bookings were up (overall +3% at actual rates; Industrial bookings +5%) driving roughly $26M of backlog growth in Q1 (≈$23M in Industrial) plus another ~$21M backlog build post‑quarter; Q1 operating margin rates were Contractor & Expansion 24%, Industrial 32%, and total operating earnings 26% (vs 27% prior); 2027 will be a 53‑week year (extra week in Q4).Graco Financial Statement Overview
Summary
Income Statement
90
Very Positive
Balance Sheet
94
Very Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.25B | 2.24B | 2.11B | 2.20B | 2.14B | 1.99B |
| Gross Profit | 1.18B | 1.17B | 1.12B | 1.16B | 1.06B | 1.03B |
| EBITDA | 715.55M | 751.53M | 678.86M | 686.59M | 641.62M | 578.00M |
| Net Income | 516.24M | 521.84M | 486.08M | 506.51M | 460.64M | 439.87M |
Balance Sheet | ||||||
| Total Assets | 3.33B | 3.27B | 3.14B | 2.72B | 2.44B | 2.44B |
| Cash, Cash Equivalents and Short-Term Investments | 712.17M | 624.08M | 675.34M | 537.95M | 339.20M | 624.30M |
| Total Debt | 44.82M | 60.96M | 48.65M | 50.06M | 126.59M | 226.11M |
| Total Liabilities | 592.37M | 620.34M | 555.08M | 497.78M | 579.25M | 733.86M |
| Stockholders Equity | 2.74B | 2.65B | 2.58B | 2.22B | 1.86B | 1.71B |
Cash Flow | ||||||
| Free Cash Flow | 631.21M | 637.92M | 514.96M | 466.24M | 176.23M | 323.33M |
| Operating Cash Flow | 678.42M | 683.59M | 621.70M | 651.02M | 377.39M | 456.90M |
| Investing Cash Flow | -174.37M | -172.80M | -342.81M | -185.27M | -226.82M | -153.30M |
| Financing Cash Flow | -336.32M | -576.05M | -139.86M | -268.01M | -434.40M | -57.14M |
Graco Technical Analysis
Negative
86.74
Price Trends
83.01
Negative
85.80
Negative
84.23
Negative
Market Momentum
-2.35
Positive
29.31
Positive
8.29
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GGG, the sentiment is Negative. The current price of 86.74 is above the 20-day moving average (MA) of 78.86, above the 50-day MA of 83.01, and above the 200-day MA of 84.23, indicating a bearish trend. The MACD of -2.35 indicates Positive momentum. The RSI at 29.31 is Positive, neither overbought nor oversold. The STOCH value of 8.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GGG.
Graco Risk Analysis
Graco disclosed 24 risk factors in its most recent earnings report. Graco reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Graco Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $15.44B | 29.34 | 12.61% | 1.56% | 7.54% | 7.09% | |
74 Outperform | $15.44B | 28.71 | 17.30% | 1.64% | 6.50% | 17.62% | |
70 Outperform | $9.86B | 36.76 | 16.30% | 0.49% | 7.18% | 5.22% | |
69 Neutral | $17.43B | 54.00 | 13.03% | 0.79% | 16.63% | -9.75% | |
68 Neutral | $14.90B | 38.94 | 7.18% | ― | -0.51% | -44.42% | |
67 Neutral | $12.64B | 29.23 | 19.65% | 1.32% | 4.61% | 7.87% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
GGG
Graco
75.32
-10.30
-12.03%
GNRC
Generac Holdings
243.97
116.71
91.71%
IEX
IDEX
205.15
19.09
10.26%
ITT
ITT
191.04
39.64
26.18%
NDSN
Nordson
271.64
72.03
36.08%
CR
Crane Company
167.39
-6.94
-3.98%
Graco Corporate Events
Business Operations and Strategy
Graco Highlights Long-Term Growth Strategy at Investor Event
Positive
May 5, 2026
On May 5, 2026, Graco Inc. published an investor presentation to support its investor relations efforts, coinciding with an investor access event at its Dayton, Minnesota facilities that showcased executive briefings, plant tours and product demon...
Executive/Board ChangesShareholder Meetings
Graco Shareholders Approve Directors, Auditor and Executive Pay
Positive
Apr 27, 2026
At its April 24, 2026 Annual Meeting of Shareholders, Graco Inc. reported the election of four directors, with Martha A. Morfitt, Mark W. Sheahan, Andrea H. Simon, and Kevin J. Wheeler each winning three-year terms, reflecting strong but not unani...
Business Operations and StrategyExecutive/Board Changes
Graco Appoints Sanjiv Gupta as New Chief Financial Officer
Positive
Mar 2, 2026
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. ...
Executive/Board Changes
Graco Director Brett Carter Resigns From Company Board
Neutral
Feb 13, 2026
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 Compens...
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.