Donaldson Q2 sales slightly miss estimates on volume declines

Overview

• Filtration products maker's fiscal Q2 sales slightly missed analyst expectations

• Adjusted EPS for fiscal Q2 remained flat year-over-year

• Company announced margin-accretive Facet acquisition to enhance filtration portfolio

Outlook

• Donaldson projects fiscal 2026 adjusted EPS between $3.93 and $4.01

• Company expects fiscal 2026 sales to grow 1% to 5% year over year

• Donaldson forecasts Aerospace and Defense sales to decrease mid-single digits in 2026

Result Drivers

• SALES GROWTH DRIVERS - Sales increased 3% due to favorable currency translation and pricing benefits, partially offset by volume declines

• FACET ACQUISITION - Acquisition of Facet to enhance core filtration portfolio in Aerospace, Defense, and Power Generation

• LIFE SCIENCES GROWTH - Life Sciences segment sales rose 16.2% driven by strong new equipment sales in Food and Beverage and Disk Drive, aided by currency translation

Company press release: ID:nBw8QrHKwa

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 6 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the environmental services & equipment peer group is "buy"

• Wall Street's median 12-month price target for Donaldson Company Inc is $96.00, about 8.1% below its February 25 closing price of $104.42

• The stock recently traded at 24 times the next 12-month earnings vs. a P/E of 21 three months ago

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