Parker-Hannifin Corporation (PH) - Stock Report

The freshest reported quarter is fiscal Q3 2026, released on 30 April 2026. Q3 sales rose 11% to $5.486 bn and organic sales rose 6.5%; reported diluted EPS was $7.06, down 4% because the prior-year quarter included a $180 m / $1.37 discrete tax benefit, while adjusted diluted EPS was $8.17, up 18%. The valuation test for the nine months: net sales were $15.744 bn, common net income was $2.557 bn, operating cash flow was $2.628 bn, capex was $286 m, and derived strict post-capex cash, defined as OCF less capex, was $2.342 bn. Management raised FY2026 guidance to about 7% reported sales growth, 5.5% organic growth, 23.9% reported segment operating margin, 27.2% adjusted segment operating margin, reported EPS of about $27.10 and adjusted EPS of about $31.20.

The key macro issue is not industrial cyclicality in the abstract, but whether Aerospace backlog and Diversified Industrial orders keep converting into reported post-capex cash while the $9.25 billion Filtration Group financing adds leverage and integration claims.

Parker-Hannifin designs motion and control technologies: hydraulics, pneumatics, electromechanical systems, filtration, fluid and gas handling, process control, engineered materials and climate-control products. Many products are engineered into customer platforms and create replacement, aftermarket and service demand; investors should judge the business on margin durability and free cash flow per share, not just industrial revenue growth.

The company reports two segments. Diversified Industrial sells to OEMs and distributors across industrial equipment, transportation, off-highway, energy, HVAC, aerospace and defense applications. Aerospace Systems sells directly to commercial and defense OEMs and end users. Backlog reached a record $12.5 bn at 31 March 2026.

Latest 10-Q subsegment view: Q1 FY2026 Diversified Industrial revenue was Motion Systems $824 m, Flow and Process Control $1.158 bn, and Filtration and Engineered Materials $1.461 bn; Aerospace was Commercial OEM $539 m, Commercial aftermarket $594 m, Defense OEM $294 m, and Defense aftermarket $214 m.

Management is pushing the Win Strategy, portfolio pruning, acquisitions and cash returns. Curtis Instruments expanded electric and hybrid vehicle controls inside Diversified Industrial. The pending Filtration Group acquisition, disclosed in the 12 November 2025 merger-agreement Form 8-K, has a $9.25 bn cash purchase price subject to a net working-capital adjustment; it is financing, not funded operating capex.