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Acceleration of commercial aerospace build rates and higher aftermarket capture from Filtration Group and CIRCOR acquisitions, driving operating margins toward 30% ahead of the FY2031 timeline.
Forward P/E multiple compression from 27.47x toward the industrial peer median of 20.0x.
We assign a Sell rating to Parker-Hannifin Corporation with a Fair value of $675.45 and Potential value of $804.43, representing -29.5% implied return against the share price of $958.22.
Parker-Hannifin delivered outstanding operational performance in FY2026, achieving record net sales of $21,499M (+8.3% reported, +6.6% organic), operating income of $5,068M (23.57% EBIT margin), and record cash flow from operations of $4,364M. Free cash flow reached $3,905M (18.2% margin), enabling $2,198M in shareholder distributions ($1,262M repurchases and $936M dividends) alongside an 11% dividend increase marking 70 consecutive years of dividend growth. Management raised its FY2031 adjusted segment target by 300 basis points to 30%.
Despite these formidable operating achievements and an expanding wide economic moat, market valuation has detached from intrinsic earnings power. At $958.22, shares trade at a forward P/E of 27.47x, representing a dramatic premium to diversified industrial peers such as Cummins at 15.41x and Emerson Electric at 22.40x. Current market pricing implies sustained multi-year double-digit EPS growth and zero execution friction across the upcoming integrations of Filtration Group and CIRCOR aerospace.345
Our synthesized valuation composite yields a fair value midpoint of $675.45, derived from forward earnings ($718.48, 35% weight), multi-stage moat fade ($765.39, 25% weight), FCFF DCF ($507.45, 20% weight), discounted earnings ($638.74, 10% weight), and owner earnings ($672.69, 10% weight). Our fair value stands 35.8% below the present-value equivalent of analyst consensus ($1,051.56, discounted from 12-month target of $1,152.58 at a 9.61% Ke), reflecting our disciplined normalization of mid-cycle operating margins and reinvestment requirements.2
With the shares offering an implied return of -29.5% to Fair value, the risk/reward asymmetry is highly unfavorable. Investors should liquidate existing positions or avoid allocating fresh capital until valuation converges toward intrinsic cash flow reality.
Aerospace Systems ($7,061M revenue in FY2026) provides flight-critical motion, hydraulic, and fuel control systems certified by aviation regulators. Re-certifying alternative supplier components entails multi-year engineering validation and prohibitive costs, locking in proprietary aftermarket revenue streams over 30+ year airframe lifecycles.58
Deep intellectual property in specialized motion control, precision filtration, and electromechanical actuation across industrial and aerospace applications, reinforced by recent acquisitions including Curtis Instruments and pending Filtration Group.5
Unmatched global distribution reach across North America ($14,386M), EMEA ($4,178M), and Asia Pacific ($2,711M). The massive installed base generates recurring MRO replacement demand through its network of distributor locations.8
Parker-Hannifin is an outstanding industrial franchise executing at peak operational capability under the Win Strategy 3.0, but market enthusiasm has driven shares to an unsustainable 41.86% premium above intrinsic fair value of $675.45. We assign a Sell rating and urge capital preservation.3
Parker-Hannifin Corporation is a leading global producer in motion and control technologies, providing precision-engineered solutions across diversified industrial and aerospace markets. The company operates through two primary reporting segments: Diversified Industrial (comprising North America and International businesses) and Aerospace Systems.
In FY2026, the company generated $21,499M in net sales, including $14,438M from Diversified Industrial and $7,061M from Aerospace Systems. Its motion technologies include fluid power, electromechanical, climate control, and filtration systems, serving mobile, industrial, and aerospace OEM and aftermarket customers globally.
Geographically, the business is anchored in the United States, which contributed $13,819M of net sales in FY2026 (North America total of $14,386M), supplemented by $4,178M in EMEA and $2,711M in Asia Pacific. Strategic portfolio expansion has been driven by the completed acquisition of Curtis Instruments and pending acquisitions of Filtration Group Corporation and CIRCOR's aerospace business.
Our stress test evaluates a simultaneous convergence of industrial down-cycle forces and capital cost headwinds. In this stressed environment, consolidated operating margin compresses from 23.57% toward the kill threshold of 20.5% as industrial pricing power exhausts. Concurrently, aerospace OEM delivery bottlenecks constrain aircraft production ramps, suppressing consolidated organic revenue growth to 2.0%. Under an elevated WACC of 10.3% and multiple contraction to 20.0x forward earnings, enterprise cash generation contracts significantly below baseline expectations, demonstrating that the equity has no margin of safety at its prevailing market price of $958.22.
North American and European industrial demand softens, while aerospace OEM delivery bottlenecks constrain production cadence. Segment incremental margins decline below historical standards as fixed cost absorption weakens, slowing earnings compounding and exposing the equity to substantial multiple de-rating.
Consolidated operating margin compresses below 20.5% over a 12-month horizon. As general industrial pricing power normalizes to historical levels, fixed cost de-absorption from softening factory volumes reduces EBIT from FY2026's $5,068M, driving an estimated -18.5% fair value impairment.57
The five developments that would weaken our investment case.
Deceleration to or below 3.0% indicates OEM delivery bottlenecks or commercial aftermarket slowdown, triggering a 100 bps reduction in consolidated terminal operating margin.
Current:13.3% organic growth in Q4 FY2026
Alert if3.0% or below for 2 consecutive quarters
Parker-Hannifin possesses a wide economic moat rooted in high customer switching costs, extensive regulatory certifications, proprietary engineering intellectual property, and an unrivaled global distribution footprint. In Aerospace Systems, which generated $7,061M in FY2026 revenue, components are custom-engineered into airframes during the initial design phase. Because replacement components require rigorous regulatory re-certification, Parker enjoys virtual sole-source exclusivity across decades of aftermarket maintenance and overhaul demand.
In the Diversified Industrial segment ($14,438M revenue in FY2026), Parker's moat is reinforced by its vast catalog of interconnected motion and control components and an expansive global distributor network spanning North America ($14,386M), EMEA ($4,178M), and Asia Pacific ($2,711M). Industrial end-users face high downtime costs if mission-critical machinery fails, creating strong incentives to replace components with genuine Parker parts via immediate local availability.
Furthermore, the continuous execution of the Win Strategy 3.0 has entrenched a structural cost advantage, allowing Parker to generate consolidated EBIT margins of 23.57%, compared to the broader industrial sector average operating margin of 16.1%. Strategic acquisitions of proprietary technologies, such as Curtis Instruments and pending deals for Filtration Group and CIRCOR aerospace, continually raise competitive barriers and reinforce pricing power across core markets.
Parker-Hannifin generates sustained economic profit, evidenced by a return on invested capital of 13.78% as of 2026-10-22 against a computed WACC of 9.27% and cost of equity of 9.61%, yielding an economic spread of over 450 basis points. In FY2026, operating income reached $5,068M on $21,499M of revenue (23.57% EBIT margin), producing $3,905M in free cash flow.2
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
The highlighted cell is Fair value when every assumption sits at its base level ($675.45). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $3.8B after modeled reinvestment of $524.1M, with terminal value at 75.4% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
Commercial aerospace build rates ramp aggressively while aftermarket pricing remains elevated, propelling Aerospace Systems organic growth and driving consolidated operating margins toward peak targets. Synergy realization from Filtration Group and CIRCOR accelerates, driving strong compound earnings growth.
Even with an earnings beat at the high end of estimates, current market valuation already discounts performance well above intrinsic fair value, justifying maintaining the prevailing stance.
Results meeting baseline expectations confirm the steady compounding trajectory but provide no fundamental catalyst to close the substantial valuation premium.
An earnings miss would expose cyclical vulnerabilities and accelerate valuation multiple compression toward peer medians.
Parker-Hannifin exhibits high cash earnings quality, underpinned by operating cash flow of $4,364M in FY2026 exceeding GAAP net income of $3,649M by 19.6%. For FY2026, reported diluted EPS was $28.48, compared to adjusted diluted EPS of $32.31. The $3.83 per share non-GAAP adjustment bridge reflects $4.56 ($584M) of acquired intangible amortization, $0.56 ($72M) of business realignment charges, and $0.31 ($41M) of acquisition-related expenses, partially offset by a discrete $0.65 ($84M) IEEPA tariff refund and related tax effects. High conversion of operating earnings into free cash flow ($3,905M in FY2026) demonstrates transparent accounting with minimal working capital drag.367
Consensus estimate momentum has been positive following the FY2026 earnings release. FY2027 consensus EPS estimates moved up from $34.09 on 2026-08-06 to $34.29 on 2026-08-07, and reached $35.57 as of 2026-10-22. FY2028 consensus EPS estimates also progressed to $39.75. Revenue estimates for FY2027 expanded from $22,632M to $24,674M, reflecting strong aerospace backlogs and management's FY2027 outlook.15
Validates commercial OEM build rate expansion and proprietary aftermarket demand durability.5
Operating cash flow reached a record $4,364M in FY2026 (20.3% of sales), up from $3,776M in FY2025. Capital expenditures remained modest at $459M (2.1% of sales), yielding record free cash flow of $3,905M (18.2% FCF margin). Free cash flow conversion exceeded 107% of GAAP net income ($3,649M), aligning with management's through-cycle target of 17% FCF margin.3567
Parker-Hannifin's ROIC reached 13.78% as of 2026-10-22, supported by continuous operating margin expansion from 14.88% in FY2017 to 23.57% in FY2026 under the Win Strategy. Capital turnover remains resilient as the company integrates strategic bolt-on acquisitions without diluting core operational efficiency.
At 13.78%, ROIC exceeds the company's computed WACC of 9.27% by 451 basis points and its moderate cost of equity of 9.61% by 417 basis points, confirming substantial economic value creation.
Reported EBIT margin expanded from 14.88% in FY2017 to 23.57% in FY2026 ($5,068M operating income on $21,499M ), with Q4 adjusted segment margins reaching a record 28.0%.
| Revenue | $21,499,000,000 |
|---|---|
| Cost of revenue | $13,397,000,000 |
| Gross profit | $8,102,000,000 |
| Operating expenses | $3,034,000,000 |
| Operating income | $5,068,000,000 |
| Non-operating items and tax | -$1,419,000,000 |
| Net income | $3,649,000,000 |
| Total assets | $30,877,000,000 |
|---|---|
| Cash | $501,000,000 |
| Current assets | $7,695,000,000 |
| Total liabilities | $15,464,000,000 |
| Current liabilities | $6,096,000,000 |
| Shareholders’ equity | $15,413,000,000 |
| Net income | $3,649,000,000 |
|---|---|
| Operating inflow | $4,765,000,000 |
| Depreciation and amortization | $937,000,000 |
| Stock-based compensation | $179,000,000 |
| Operating cash flow | $4,364,000,000 |
| Operating outflow | $401,000,000 |
| Cash available | $4,831,000,000 |
| Beginning cash | $467,000,000 |
| Investing outflow | $1,390,000,000 |
| Capex | $459,000,000 |
| Other investing activities | $931,000,000 |
| Financing outflow | $2,934,000,000 |
| Share repurchases | $1,262,000,000 |
| Dividends paid | $936,000,000 |
| Net debt repayment | $737,000,000 |
| Exchange-rate effect | $6,000,000 |
| Ending cash | $501,000,000 |
| Investing cash flow | -$1,390,000,000 |
| Financing cash flow | -$2,934,000,000 |
Source: SEC EDGAR · Filed 2026-08-21 · SEC EDGAR
| Revenue by operating segment | Revenue | Share | YoY |
|---|---|---|---|
| Diversified Industrial | $14.4B | 67.2% | 5.7% |
| Aerospace Systems | $7.1B | 32.8% | 14.2% |
Point-in-time financial data used in the 2026-10-22 analysis.
| Period | Revenue | EBITDA | Net income | Operating cash flow | Free cash flow | Capex | Depreciation and amortization | Stock-based compensation | Share repurchases | Dividends paid | Net debt issuance | Investing cash flow | Financing cash flow | Beginning cash | Ending cash | Cash and investments | Total debt | Operating margin | ROIC | WACC | ROIC − WACC spread |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017-06-30 | $12B | $1.8B | $983.4M | $1.3B | $1.1B | $203.7M | $355.2M | $80.3M | $338.1M | $345.4M | — | -$3.4B | $1.8B | — | $884.9M | $924.2M | $5.3B | 14.9% | — | 6.0% | — |
| 2018-06-30 | $14.3B | $2.4B | $1.1B | $1.6B | $1.3B | $247.7M | $466.1M | $118.8M | $381M | $365.3M | — | $23.7M | -$1.7B | $884.9M | $822.1M | $855.1M | $4.4B | 14.3% | — | 6.8% | — |
| 2019-06-30 | $14.3B | $2.6B | $1.5B | $1.7B | $1.5B | $195.1M | $436.2M | $104.1M | $860.1M | $412.5M | — | -$218.5M | $902.3M | $822.1M | $3.2B | $3.4B | $6.5B | 15.6% | — | 6.0% | — |
| 2020-06-30 | $13.7B | $2.4B | $1.2B | $2.1B | $1.8B | $232.6M | $537.5M | $111.4M | $216M | $453.8M | — | -$5B | $449.3M | $3.2B | $685.5M | $756.3M | $7.7B | 14.4% | — | 5.1% | — |
| 2021-06-30 | $14.3B | $3.1B | $1.7B | $2.6B | $2.4B | $210M | $595.4M | $121.5M | $218.8M | $475.2M | — | -$13K | -$2.6B | $685.5M | $733.1M | $772.2M | $6.6B | 17.1% | — | 6.7% | — |
| 2022-06-30 | $15.9B | $2.4B | $1.3B | $2.4B | $2.2B | $230M | $571.8M | $137.1M | $460.1M | $569.9M | $5B | -$418.8M | $3.9B | $733.1M | $6.6B | $563.7M | $10.1B | 18.8% | — | 7.3% | — |
| 2023-06-30 | $19.1B | $4.1B | $2.1B | $3B | $2.6B | $381M | $818.1M | $143M | $297M | $704M | $40M | -$8.2B | -$971M | $6.6B | $475M | $483.6M | $10.8B | 17.9% | — | 8.3% | — |
| 2024-06-30 | $19.9B | $5B | $2.8B | $3.4B | $3B | $400M | $927.1M | $155M | $332M | $782M | -$2B | -$298M | -$3.1B | $475M | $422M | -$612.2M | $8.4B | 20.4% | — | 9.1% | — |
| 2025-06-30 | $19.9B | $5.4B | $3.5B | $3.8B | $3.3B | $435M | $907M | $159M | $1.8B | $861M | -$1.4B | $224M | -$4B | $422M | $467M | $467M | $7.5B | 21.9% | — | 8.8% | — |
| 2026-06-30 | $21.5B | $5.9B | $3.6B | $4.4B | $3.9B | $459M | $937M | $179M | $1.3B | $936M | -$737M | -$1.4B | -$2.9B | $467M | $501M | $501M | $7.5B | 23.6% | — | 8.5% | — |
Parker-Hannifin Corporation (PH) trades at 27.5x forward earnings against a peer median of 24.2x. Its EV/EBITDA of 22.8x compares with a peer median of 20.2x. The comparison uses 4 peers: Emerson Electric Co., Cummins Inc., GE Vernova Inc. and AMETEK Inc., as of 2026-10-20 to 2026-10-22.
The industrial machinery and equipment sector exhibits a benchmark capex-to-revenue ratio of 4.1% and a capex-to-depreciation ratio of 0.68 (68%). In comparison, Parker-Hannifin's FY2026 capex of $459M on $21,499M revenue represents a 2.13% capex-to-revenue intensity, while its capex-to-depreciation ratio stands at 1.30 ($459M capex vs $353M depreciation).7
The upside cycle scenario is propelled by a multi-year commercial aerospace super-cycle, where commercial aircraft build rates accelerate mid-teens and aging global fleets sustain elevated aftermarket utilization. Concurrently, infrastructure investments, factory automation, and domestic manufacturing re-shoring accelerate North American industrial volume growth.
A cyclical downturn would emerge from synchronized discrete manufacturing contractions across North America and Europe, amplified by OEM commercial aircraft delivery delays. If short-cycle factory automation and heavy machinery demand stalls, industrial volume deleveraging would compress incremental margins and expose peak-cycle earnings expectations.
Parker-Hannifin is exceptionally positioned as a prime technological partner across motion and control platforms. By combining proprietary aerospace systems with diversified industrial distribution, the company maintains pricing power and high aftermarket capture that insulate it from typical short-cycle volatility. However, this strong structural positioning is already aggressively priced into current valuation multiples.
With shares priced at $958.22 offering -29.5% implied return to Fair value of $675.45, capital preservation mandates no allocation until valuation normalizes.3
Managing exposure to high-multiple industrial compounders requires rigorous discipline when market valuation detaches from cash flow fundamentals. Given the unfavorable return implied by -29.5%, risk management prioritizes capital preservation through position liquidation and reallocation toward fairly valued alternatives. Portfolio hedges via sector index puts or short delta overlays can mitigate downside exposure for mandates with taxable or contractual retention constraints.
Trading at a 41.86% premium to house fair value of $675.45 and a forward P/E of 27.47x, the stock offers negative margin of safety and an implied return of -29.51%.3
Although Parker-Hannifin boasts an expanding wide moat, flight-critical aerospace intellectual property, and superior ROIC of 13.78%, current pricing fully discounts the FY2031 30% margin target, leaving zero buffer for cyclical shocks.5
With the forward P/E multiple at 27.47x compared to industrial peers like Cummins at 15.41x and North American order growth facing a high comparison base, risk/reward is heavily skewed to the downside.34
Parker-Hannifin is an exceptional industrial compounder with an expanding wide moat, yet the current share price of $958.22 trades at a 41.86% premium to house fair value of $675.45 (-29.51% implied return). We recommend divesting equity holdings to preserve capital.3
While management's execution under the Win Strategy 3.0 and double-digit Aerospace Systems growth remain impressive, current market multiples leave no room for execution errors, cyclical deceleration, or higher-for-longer capital costs.
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The records this analysis drew on, as they stood when it was run.
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Forward P/E multiple compresses below 20.0x from current 27.47x over an 18-month horizon. Trading multiples converge toward peer benchmarks such as Cummins at 15.41x, resulting in an estimated -20.0% fair value impact.34
Annual organic revenue growth drops below 2.0% YoY over a 24-month horizon. Supply chain bottlenecks at major airframe manufacturers impede commercial aircraft delivery ramps, while international industrial demand stagnates, driving an estimated -24.0% fair value impact.5
WACC increases above 10.3% from the current computed 9.27% over a 12-month horizon. Higher long-term risk-free rates and widening corporate credit spreads raise discounting hurdles, driving an estimated -14.0% fair value impact.2
Incrementals falling below 20.0% would falsify the Win Strategy operating leverage thesis, capping normalized operating margins at 25.0% and reducing forward EPS by 8%.
Current:Near top end of 30% to 35% target range
Alert ifBelow 20.0% over full fiscal year
Contraction in domestic organic growth would signal widespread industrial weakness, shifting valuation to bear case assumptions and cutting top-line growth trajectory by 200 bps.
Current:4.9% in Q4 FY2026
Alert if0.0% or below for 2 consecutive quarters
Margin compression below 20.5% marks severe operational de-leverage and exhaustion of industrial pricing power, driving an estimated 18.5% impairment to fair value.
Current:23.57% in FY2026
Alert ifBelow 20.5%
De-rating below 20.0x toward industrial peer medians reflects multiple de-leveraging, driving an estimated 20.0% fair value impact.
Current:27.47x as of 2026-10-22
Alert ifBelow 20.0x
| Short-cycle industrial demand deceleration across North America and Europe | medium | 6-18 months | Broad end-market diversification and extensive global distributor channels buffer regional volatility, supported by secular infrastructure and automation demand.58 |
| Normalization of industrial pricing power limiting incremental margin expansion | medium | 12-36 months | Ongoing lean productivity tools under Win Strategy 3.0 and aerospace pricing opportunities offset normalized general industrial pricing dynamics.5 |
Under the moderate discount rate, $137 comes from forecast-period earnings and $508 from the long-term value, totaling $645.
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and terminal value at WACC, then adjust for signed net debt per current share.
Discounted forecast-period cash flows ($138) plus discounted terminal value ($425) minus signed per current share ($55.28) equals the $507 lens value shown above. Negative net debt is , so subtracting it raises value.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
Solve for the growth rate that makes the model value equal the report-date share price.
Multiply the peer median PEG by this stock's forecast growth to derive an implied forward P/E, then apply it to forward EPS.
Management executes the Win Strategy to deliver steady revenue growth, with operating margins expanding across the forecast horizon. Free cash flow margin sustains near target levels, funding disciplined debt paydown and steady capital returns.
Core indicator of Win Strategy 3.0 execution and incremental margin delivery in the 30% to 35% target range.5
Provides strongest forward correlation to organic sales trajectory across North American and International industrial segments.
Underpins debt deleveraging capacity following acquisition outlays and funds extended dividend growth record.
| $26.29B |
| $27.73B |
| $29.12B |
| Revenue growth | 7.0% | 7.8% | 6.0% | 5.5% | 5.0% |
| Operating margin | 24.5% | 25.2% | 25.8% | 26.4% | 27.0% |
| Operating income | $5.64B | $6.25B | $6.78B | $7.32B | $7.86B |
| Tax rate | 22.5% | 22.5% | 22.5% | 22.5% | 22.5% |
| NOPAT | $4.37B | $4.84B | $5.26B | $5.67B | $6.09B |
| Reinvestment | $524.14M | $581.17M | $683.27M | $737.61M | $853.03M |
| Reinvestment rate (of NOPAT) | 12.0% | 12.0% | 13.0% | 13.0% | 14.0% |
| Free cash flow to firm | $3.84B | $4.26B | $4.57B | $4.94B | $5.24B |
| Diversified Industrial revenue | $15.45B | $16.65B | $17.65B | $18.62B | $19.56B |
| Aerospace Systems revenue | $7.55B | $8.14B | $8.63B | $9.11B | $9.56B |
| Terminal growth | 2.8% | 2.8% | 2.8% | 2.8% | 2.8% |
Capital deployment in FY2026 reflected a balanced framework across M&A, shareholder returns, and debt retirement. Parker deployed $1,014M for acquisitions, primarily completing Curtis Instruments, and announced pending transactions for Filtration Group and CIRCOR aerospace. Total capital returned to shareholders approached $2.2B, comprising $1,262M in share repurchases and $936M in common dividends. The board raised the dividend by 11% to an annualized $8.00 per share, marking 70 consecutive fiscal years of annual dividend increases. Net debt discipline reduced long-term debt to $6,766M (total debt of $8,733M) against cash of $501M, keeping leverage manageable ahead of upcoming acquisition closings.
FY2026 free cash flow of $3,905M represented 18.2% of revenue and 107% of net income, comfortably exceeding the 17% through-cycle target.
High cash generation provides ample liquidity to absorb the pending acquisitions of Filtration Group and CIRCOR aerospace while maintaining rapid debt deleveraging.
At $958.22, Parker trades at a forward P/E of 27.47x, compared to industrial peers Emerson Electric (22.40x) and Cummins (15.41x).
Even after modeling aggressive margin progression toward 27.0% consolidated EBIT, the house weighted fair value is $675.45, indicating that current market pricing leaves the stock vulnerable to a 29.51% multiple de-rating.
| Margin |
|---|
| PH | Parker-Hannifin Corporation | $120.8B | 27.5x | 5.6x | 22.8x | 25.1% | — |
| EMR | Emerson Electric Co. | $91.4B | 22.4x | 4.9x | 16.9x | 12.8% | 26.9% |
| CMI | Cummins Inc. | $74.0B | 15.4x | 2.1x | 15.8x | 21.1% | 11.9% |
| GEV | GE Vernova Inc. | $237.1B | 35.2x | 5.7x | 58.4x | 82.6% | 7.5% |
| AME | AMETEK Inc. | $56.7B | 25.9x | 7.2x | 23.4x | 14.6% | 26.2% |
| Federal infrastructure legislation and supply chain near-shoring are driving domestic manufacturing facility investments and heavy-duty equipment demand, fueling North American order momentum. |
| Cap normalized operating margin assumptions and reduce forward earnings estimates. |
| North American organic revenue growth | Negative organic revenue growth for consecutive quarters | Shift base case to bear case weighting and reduce revenue growth trajectory. |
| Consolidated operating margin | Below 20.5% | Trigger immediate portfolio review and formal re-underwriting of industrial pricing durability. |
