Parker-Hannifin Stock Exhibits Strong Prospects Despite Headwinds

Parker-Hannifin Corporation PH is witnessing strong momentum in the Aerospace Systems segment. The segment is benefiting from strong momentum in commercial and military end markets across both OEM and aftermarket channels. The segment’s revenues jumped approximately 13% year over year in fiscal 2025 (ended June 2025). In the quarters ahead, it is poised to gain from strong demand for its products and aftermarket support services in the general aviation market, driven by growth in air transport activities. Strength in its defense end market, owing to stable U.S. and international defense spending volumes, is also likely to be beneficial.

PH solidified its product portfolio and leveraged business opportunities through asset additions. In June 2025, the company inked a deal to acquire Curtis Instruments, Inc. The acquisition is expected to boost its electrification portfolio and strengthen its capabilities in electric vehicle motors, hydraulics and electrification technologies. Subject to customary closing conditions, the acquisition is expected to close by the end of 2025. In September 2022, Parker-Hannifin acquired Meggitt plc, a global leader in motion and control technologies. The acquisition expanded Parker-Hannifin’s presence in the United Kingdom, positioning it well to provide a broader suite of solutions for aircraft and aero-engine components and systems.

The company is committed to rewarding its shareholders handsomely through dividend payments and share buybacks. In fiscal 2025, Parker-Hannifin rewarded its shareholders with dividends of $861 million, up 10.1%. The company repurchased shares worth $851 million in the same period. In April 2025, PH hiked its dividend by 10% to $1.80 per share (annually: $7.20).

Price Performance of PH

In the year-to-date period, this Zacks Rank #3 (Hold) company’s shares have gained 19.4% compared with the industry’s 7.7% growth.

However, weakness across the Diversified Industrial segment is concerning for the company. Challenging conditions in the off-highway end market, due to softness in the agricultural sector, have been affecting both the North America and international businesses of the segment. Weakness in the transportation end market, arising from lower demand for automotive cars, is ailing the North America and international businesses as well. Challenges in the energy end market, owing to lower oil & gas prices, affected the segment’s performance in fiscal 2025. The Diversified Industrial segment’s sales decreased 5.5% in fiscal 2025 on a year-over-year basis.

Parker-Hannifin operates across diverse regions, which exposes it to certain political, environmental and geopolitical issues. Moreover, it remains vulnerable to currency translation risks, which may affect its performance in the quarters ahead. A stronger U.S. dollar may depress the company's overseas business results in the near term. In fiscal 2025, foreign currency translation lowered the Diversified Industrial segment’s sales by 0.5%.

Stocks to Consider

Some better-ranked companies are discussed below.

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This article originally published on Zacks Investment Research (zacks.com).

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