Value
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.6 |
| P/S | 6.4 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 4.4 |
| PEG | 3.2 |
| Analyst target | 4.0 |
- ▸Forward P/E: 28.2x
- ▸PEG: 3.77
PH · Why this verdict
Why Parker-Hannifin (PH) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Parker-Hannifin carries a wide economic moat with operating margins of 17%, a Piotroski F-Score of 7 out of 9, and superior ROE versus peers — demonstrating compounder-quality characteristics in industrial machinery. Quality breakdown | Operating margins remain above 15% and ROE stays above peer median for at least 4 consecutive quarters. | →Stable |
| CounterFree cash flow conversion at 80% of net income falls short of the highest-quality peers, suggesting some earnings are not being fully converted to cash. | ||
Parker-Hannifin beat earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 7.2%, reflecting disciplined cost management and pricing power across industrial cycles. Earnings | Earnings beat streak extends to 6 quarters with average quarterly surprise remaining above 5%. | →Stable |
| CounterThe most recent beat was only 4.4%, the smallest in the streak, potentially indicating that consensus expectations have caught up to management's delivery pace. | ||
At a forward P/E of 26.9x and a PEG ratio of 3.59, the stock is expensively valued relative to its growth rate, with current price already at the analyst target implying only 1.1% further upside. Valuation breakdown | Stock earnings growth accelerates to justify current valuation, with next twelve months EPS growth exceeding 15% to bring the PEG ratio below 2.0. | →Stable |
| CounterPremium valuation for a wide-moat industrial compounder can persist for years; investors may continue to pay up for the consistency and quality of Parker-Hannifin's business. | ||
News sentiment is positive at +0.70 based on recent coverage, momentum score is 7.4 out of 10, and volume is accumulating with a rising OBV — the stock is in a technical breakout pattern above all major moving averages. Sentiment breakdown | Momentum score remains above 6.5 and the stock holds above its 200-day moving average for 6 consecutive months. | →Stable |
| CounterThe stock is above the analyst-estimated max pain level of $690, and a position above max pain often creates headwinds from options market dynamics. | ||
Parker-Hannifin carries a wide economic moat with operating margins of 17%, a Piotroski F-Score of 7 out of 9, and superior ROE versus peers — demonstrating compounder-quality characteristics in industrial machinery.
→StableQuality breakdown
- Expectation
- Operating margins remain above 15% and ROE stays above peer median for at least 4 consecutive quarters.
CounterFree cash flow conversion at 80% of net income falls short of the highest-quality peers, suggesting some earnings are not being fully converted to cash.
Parker-Hannifin beat earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 7.2%, reflecting disciplined cost management and pricing power across industrial cycles.
→StableEarnings
- Expectation
- Earnings beat streak extends to 6 quarters with average quarterly surprise remaining above 5%.
CounterThe most recent beat was only 4.4%, the smallest in the streak, potentially indicating that consensus expectations have caught up to management's delivery pace.
At a forward P/E of 26.9x and a PEG ratio of 3.59, the stock is expensively valued relative to its growth rate, with current price already at the analyst target implying only 1.1% further upside.
→StableValuation breakdown
- Expectation
- Stock earnings growth accelerates to justify current valuation, with next twelve months EPS growth exceeding 15% to bring the PEG ratio below 2.0.
CounterPremium valuation for a wide-moat industrial compounder can persist for years; investors may continue to pay up for the consistency and quality of Parker-Hannifin's business.
News sentiment is positive at +0.70 based on recent coverage, momentum score is 7.4 out of 10, and volume is accumulating with a rising OBV — the stock is in a technical breakout pattern above all major moving averages.
→StableSentiment breakdown
- Expectation
- Momentum score remains above 6.5 and the stock holds above its 200-day moving average for 6 consecutive months.
CounterThe stock is above the analyst-estimated max pain level of $690, and a position above max pain often creates headwinds from options market dynamics.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Parker-Hannifin has delivered four consecutive earnings beats averaging 7.2% above estimates with a wide economic moat and operating margins of 17%, but the stock is richly valued at a forward P/E of 26.9x and trades at its analyst price target leaving little near-term upside.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.3 |
| ROA | 6.4 |
| Gross margin | 3.5 |
| Op margin | 8.6 |
| Net margin | 8.3 |
| Current ratio | 4.4 |
| FCF quality | 6.0 |
| Moat | 7.5 |
| Piotroski F | 7.8 |
- ▸Strong margins: 17%
- ▸Earnings quality warning: 80% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
3.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.2 |
| EPS growth | 1.2 |
Momentum
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 9.4 |
| MA position | 9.0 |
| Volume | 1.1 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.0 |
| Analyst rating | 7.5 |
| Price target | 6.1 |
- ▸LLM news sentiment: +0.60 (n=1)
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.9 |
| quality rank | 8.5 |
| growth rank | 5.6 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.7 |
| support resistance | 2.5 |
| 52w position | 8.8 |
Risk (lower is worse)
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.4 |
| days to cover | 9.0 |
| volatility | 6.4 |
| put call | 8.4 |
| implied vol | 6.1 |
| beta | 6.6 |
| debt equity | 7.1 |
| news risk | 6.0 |
Catalyst
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.1 |
| dividend safety | 5.2 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 83.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +2 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+2Passed (7)
- MOMENTUM:6.9>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.60
- EARNINGS_PROXIMITY:31d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.3=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.35
Upside
-3.6%
Downside
10.2%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 69, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.4 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 7.4) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.3=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.35 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.4, Sentiment at 7.2, and Momentum at 6.9; the weakest are Growth at 3.2, Value at 3.7, and Peer rank at 4.3. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.35 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Wide Moat Margin Leadership
Trip ifOperating margin falls below 14% for 2 consecutive quarters, indicating meaningful deterioration from the current 17% level.
- P2Four Quarter Earnings Excellence
Trip ifEarnings miss consensus estimates by more than 5% in the next quarterly report, breaking the 4-quarter beat streak.
- P3Rich Valuation Limited Upside
Trip ifForward P/E expands above 32x without a corresponding increase in earnings growth expectations, signaling valuation risk.
- P4Positive News Sentiment Momentum
Trip ifPrice drops below the 200-day moving average and momentum score falls below 5.5, signaling technical breakdown.