Parker Hannifin Corporation Stock Buy Recommendation Reiterated (PH)
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- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.02, which illustrates the ability to avoid short-term cash problems.
- PH, with its decline in revenue, slightly underperformed the industry average of 0.3%. Since the same quarter one year prior, revenues slightly dropped by 0.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- PARKER-HANNIFIN CORP's earnings per share declined by 17.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PARKER-HANNIFIN CORP increased its bottom line by earning $7.44 versus $6.37 in the prior year. For the next year, the market is expecting a contraction of 13.7% in earnings ($6.42 versus $7.44).
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, PH has underperformed the S&P 500 Index, declining 6.24% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
--Written by a member of TheStreet Ratings Staff. FREE for a limited time only: Get TheStreet Ratings #1 Stock Report NOW!
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