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Industrials

Parker Hannifin

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Market Data

Financials

XBRL · SEC EDGAR

2008–2025(18yr)

Revenue

Net Income

Free CF

Metric	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$12.1B	$10.3B	$10.0B	$12.3B	$13.1B	$13.0B	$13.2B	$12.7B	$11.4B	$12.0B	$14.3B	$14.3B	$13.7B	$14.3B	$15.9B	$19.1B	$19.9B	$19.9B	-0.4%
Gross Profit	$2.8B	$2.1B	$2.1B	$3.0B	$3.2B	$2.9B	$3.0B	$3.1B	$2.5B	$2.8B	$3.5B	$3.6B	$3.4B	$3.9B	$4.5B	$6.4B	$7.1B	$7.3B	+2.6%
Gross Margin	23.1%	20.6%	21.5%	24.0%	24.2%	22.5%	22.9%	24.0%	22.3%	23.6%	24.7%	25.3%	24.9%	27.2%	28.2%	33.7%	35.8%	36.9%	+1.1pp
Operating Income	—	$1.0B	$1.1B	$1.8B	$2.0B	$1.8B	$1.8B	$1.8B	$1.6B	$1.8B	$2.2B	$2.4B	$2.0B	$2.5B	$3.0B	$3.4B	$4.1B	$4.3B	+6.8%
Operating Margin	—	9.7%	11.4%	14.8%	15.2%	13.8%	13.5%	14.5%	13.9%	14.9%	15.7%	17.0%	14.4%	17.1%	18.8%	17.9%	20.4%	21.9%	+1.5pp
Net Income	$949.5M	$508.5M	$554.1M	$1.0B	$1.2B	$948.4M	$1.0B	$1.0B	$806.8M	$983.4M	$1.1B	$1.5B	$1.2B	$1.7B	$1.3B	$2.1B	$2.8B	$3.5B	+24.2%
Net Margin	7.8%	4.9%	5.5%	8.5%	8.8%	7.3%	7.9%	8.0%	7.1%	8.2%	7.4%	10.6%	8.8%	12.2%	8.3%	10.9%	14.3%	17.8%	+3.5pp
Free Cash Flow	$1.0B	$858.5M	$1.1B	$959.6M	$1.3B	$925.0M	$1.2B	$1.1B	$1.0B	$1.1B	$1.4B	$1.5B	$1.8B	$2.4B	$2.2B	$2.6B	$3.0B	$3.3B	+12.0%
FCF Margin	8.5%	8.3%	10.9%	7.8%	10.0%	7.1%	8.9%	8.5%	9.0%	9.1%	9.5%	10.7%	13.4%	16.5%	13.9%	13.6%	15.0%	16.8%	+1.9pp
EPS (Diluted)	$5.53	$3.13	$3.40	$6.37	$7.45	$6.26	$6.87	$6.97	$5.89	$7.25	$7.83	$11.48	$9.29	$13.35	$10.09	$16.04	$21.84	$27.12	+24.2%

Total Debt$7.5B

Cash & Equiv.$467.0M

Net Debt$7.0B

3 min read

1. THE BIG PICTURE

Parker Hannifin is a bet on the "Win Strategy" business system’s ability to extract premium margins from a massive, fragmented portfolio of industrial and aerospace parts. While Parker Hannifin faced a slight revenue contraction over the last twelve months, its recent 9% quarterly sales jump suggests a portfolio transformation is taking hold, with a surge in commercial aerospace beginning to override broader industrial sluggishness.

2. WHERE THE RISKS HIT HARDEST

Parker Hannifin’s "Global Reach" and decentralized structure are threatened by "International Operations" risks because 36% of net sales are now exposed to non-U.S. volatility, including trade restrictions with China (10-K Item 1A). Furthermore, the "Interconnected Technology Portfolio" strength is vulnerable to "Raw Material and Component Pricing" risks; if Parker Hannifin cannot pass through rising costs due to competitive pressure, its margin advantage over peers like Honeywell (17.8% vs 11.7% net margin) could erode (XBRL).

3. WHAT THE NUMBERS SAY TOGETHER

The data reveals a company becoming more efficient even as its long-term top-line growth remains uneven. While trailing twelve-month revenue growth is slightly negative (-0.4%), the most recent quarter showed 9% growth, driven by a 14.5% spike in Aerospace (8-K). This divergence suggests a structural shift toward higher-margin aerospace aftermarket and OEM business, which grew 17% and 26% respectively. However, Parker Hannifin’s net debt of $9.5 billion is significantly higher than most peers, suggesting that the "Portfolio Expansion" strategy, including the pending Filtration Group acquisition, is being funded by a levered balance sheet (XBRL).

4. IS IT WORTH IT AT THIS PRICE?

At 28.0x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Parker Hannifin trades at a 19% premium to the peer median of 23.6x (XBRL). The market is currently pricing in roughly 7.6% long-term growth (CAPM analysis). This is a demanding valuation for a company with -0.4% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth, ranking 5th out of 6 peers. While its 17.8% net margin is superior to Honeywell (11.7%) and Emerson (12.7%), it trails Illinois Tool Works (21.6%). For this price to be right, Parker Hannifin must sustain the high-single-digit organic growth seen in the last quarter (7%) and successfully integrate the Filtration Group acquisition to boost its 14.1% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin toward the levels of AMETEK (22.6%). If growth slows to 5%, the justified multiple falls to 16.1x (CAPM analysis).

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if the Aerospace segment’s 14.5% growth rate decelerates, as this is currently the primary engine offsetting stagnant North American industrial sales (3.0% growth).
Constructive if FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin expands toward 20%, signaling that "The Win Strategy 3.0" is successfully converting the "transformed portfolio" into higher cash returns.
Cautious if net debt-to-FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders leverage increases significantly following the Filtration Group acquisition, limiting Parker Hannifin's ability to maintain its 1.2% buyback yield.

6. BOTTOM LINE

Structural Advantage: A decentralized operating model combined with a "Win Strategy" business system that enables specialized application engineering across a unique, interconnected technology portfolio.

Bottom Line: Parker Hannifin is a high-quality operator trading at a steep premium that requires near-perfect execution in aerospace to justify its current valuation.

Source: Synthesis · LLM Analysis

3 min read

1. Top 5 Material Risks

Macroeconomic Sensitivity: Parker Hannifin’s performance is tied to global manufacturing and end-market activity. Downturns in these areas, alongside inflation, interest rate changes, and credit availability, directly impact purchase levels, capital expenditures, and order rates.
International Operations: With 36% of net sales derived from outside the United States in 2025, Parker Hannifin faces risks including currency exchange fluctuations, trade restrictions (specifically regarding China), and potential nationalization of enterprises.
Cybersecurity and Data Privacy: Reliance on IT systems—including those managed by third parties—creates vulnerability to breaches, extortion, and system failures. Such events threaten to disrupt operations and result in significant fines or penalties.
Raw Material and Component Pricing: Fluctuations in raw material costs and the pricing of component parts from suppliers can compress profit margins. Parker Hannifin may be unable to pass these costs to customers due to contract terms or competitive pricing pressure.
Unexpected Operational Disruptions: Natural disasters, pandemics, and man-made events like war or civil unrest can cause physical damage to manufacturing facilities or distribution centers, leading to supply chain interruptions and increased costs.

2. Company-Specific Risks

Acquisition Integration: Parker Hannifin’s growth strategy relies on acquisitions and joint ventures. Failure to integrate these businesses, realize anticipated synergies, or avoid unexpected liabilities could adversely affect financial results.
Climate-Related Goals: The commitment to near-total decarbonization (Scope 1 and 2) by 2040 requires significant resource expenditure. Failure to meet these goals or satisfy investor/customer sustainability standards could damage reputation and market valuation.
Pension and Benefit Liabilities: Funding requirements for defined benefit pension plans are sensitive to market interest rates and asset returns. Rising healthcare costs, which Parker Hannifin partially absorbs, also pose a risk to future results.
Goodwill Impairment: Significant goodwill on the balance sheet is subject to annual impairment testing. A decline in stock price, market capitalization, or industry growth rates could trigger non-cash charges to earnings.

3. Regulatory/Legal Risks

Environmental Liability: Parker Hannifin is designated as a "potentially responsible party" under the U.S. federal "Superfund" law, creating exposure to clean-up costs and property damage claims.
Government Contracting: As a supplier to the U.S. government, Parker Hannifin is subject to specific acquisition regulations and potential investigations. Non-compliance could lead to contract termination or suspension from future bidding.
Antitrust and Competition Laws: Operations in the U.S. and Europe are subject to strict antitrust laws. Violations could result in civil penalties, third-party damage claims, or the invalidation of commercial agreements.
Anti-Corruption Compliance: Parker Hannifin is subject to the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act. Prohibited acts by employees or agents could lead to criminal judgments, fines, and reputational damage.

4. Financial Impact Map

Macroeconomic Downturns → Operating Profits and Margins → Impacts order rates and revenue levels across global end-markets. International Trade Barriers → Net Sales → 36% of total net sales are generated outside the U.S., making them vulnerable to tariffs and trade restrictions. Cybersecurity Incidents → Results of Operations → Potential for fines, ransom demands, and increased security/compliance costs. Raw Material Price Volatility → Profit Margins → Time delays in passing price increases to customers can compress margins. Goodwill Impairment → Stockholders’ Equity → Potential for significant non-cash charges to earnings if impairment is triggered by lower-than-projected cash flows.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
10-Q	Jan 2026	Dec 2025
8-K	Jan 2026	—
14A	Sep 2025	—
10-K	Aug 2025	Jun 2025