Morgan Stanley Issues an Equal Weight Rating For Parker-Hannifin Corporation (PH)

On June 5, Morgan Stanley launched coverage of Parker-Hannifin Corporation (NYSE:PH) with an Equal Weight rating, assigning a price target of $700. This rating is in line with Parker-Hannifin's shift towards a secular business model, scaling its Aero division, and strengthening its position in long-cycle industrial markets by conducting mergers and acquisitions.

Morgan Stanley analysts observed that this business transformation has led to a higher trading multiple for PH compared to historical metrics, which is demonstrated by its PE ratio of 25.3x and a strong ROE of 27%. Parker-Hannifin Corporation (NYSE:PH)'s string of successful business acquisitions further boosts its present valuation.

Nevertheless, the analysts reflected on possible challenges, such as securing mid-single digit growth numbers organically in its industrial segment, which could cancel out the ongoing margin gains forecasted for PH.

Parker-Hannifin Corporation (NYSE:PH) is an Ohio-based global manufacturer specializing in motion and control technologies, with the business catering to the industrial, mobile, and aerospace sectors. Top aircraft and engine manufacturers worldwide use PH's flight control, hydraulic, fuel-inerting, fluid handling, thermal management, pneumatic, and lubrication systems.

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Disclosure: None.