Is Parker-Hannifin Corporation (PH) Fairly Valued?
Parker-Hannifin Corporation valuation review using P/E, fair value, revenue growth, EPS growth, net margin, and TGMCharts chart exhibits as of August 12, 2026.
By TGMCharts Research · Data as of · Updated
Parker-Hannifin Corporation commands a premium market multiple of 37.54x trailing earnings, which places the current market price of $1,070 significantly above the independent analyst DCF (FMP) benchmark of $697. Whether this premium is sustainable depends on structural profitability and growth support.
The market's valuation of the company implies high expectations for cash-flow generation. While long-term historical growth rates show a five-year revenue CAGR of -16.70% and a five-year EPS CAGR of -8.55%, recent trends show positive operational expansion. A robust net margin of 16.97% provides fundamental support, but the negative margin of safety of -34.81% relative to the analyst-DCF reference suggests that the current valuation leaves little room for operational disruption.
- Parker-Hannifin Corporation closed at $1,070 on August 12, 2026.
- Trailing P/E is 37.54x and price-to-sales is 6.36x.
- Analyst DCF (FMP) is $697 with margin of safety at -34.81%.
- Five-year revenue CAGR is -16.70% and five-year EPS CAGR is -8.55%.
- Earnings yield is 2.66% and net margin is 16.97%.
Valuation Setup
The market price, model anchor, growth support, and profitability facts behind the valuation read.
Premium Industrial Pricing Demands Robust Fundamental Justification
When evaluating the investment thesis for Parker-Hannifin Corporation, analysts must determine whether the market's current valuation of the business is supported by underlying operational trends. As of August 12, 2026, the equity closed at $1,070, reflecting a trailing earnings multiple of 37.54x. This premium multiple must be weighed against an independent analyst DCF (FMP) valuation of $697, which yields a negative margin of safety of -34.81%.
Assessing this valuation requires looking beyond any single financial ratio. This analysis examines the interplay between the company's market multiples, independent cash flow models, historical growth vectors, and structural profitability. When these indicators align, they build a stronger case for the current valuation; when they diverge, they signal that the market may be overestimating future cash flows.
Current compounder snapshot · PH
Live supporting context; not part of the article's frozen 2026-08-12 evidence snapshot.
- Score
- 25/100
- 10Y CAGR
- 6.6%
- Median YoY
- 3.5%
- YoY volatility
- σ 9.9pp· smooth
- Quarters ≥ 20%
- 7 of 40
- Negative quarters
- 10
- Valuation vs own 10Y history
- P/S 6.3x · 10Y median 2.4x · 99th percentile · as of Aug 13, 2026
How this score is computed
- Quarters at or above 20%: 7 of 40 → 7 of 40 pts
- Steadiness (typical swing 9.9pp) → 17.9 of 25 pts
- Pace (median 3.5% YoY) → 0 of 20 pts
- Latest quarter (9.8% YoY) → 0 of 15 pts
- Score: 25 of 100
Annualized revenue (TTM) · by quarter, last 40
Quarterly YoY revenue growth vs the 20% line
P/S multiple vs its 10Y median
Market Multiples Reflect High Expectations Relative to Earnings Yield
The market currently prices this industrial asset at a price-to-sales ratio of 6.36x. This sales multiple, combined with a trailing earnings multiple of 37.54x, indicates that investors are paying a significant premium for the company's revenue stream. This pricing structure translates to a compressed earnings yield of 2.66%, which reduces the immediate yield cushion for equity holders and increases the asset's sensitivity to interest rate fluctuations and macroeconomic shifts.
PH P/E ratio Chart
The trailing earnings multiple is the main valuation exhibit because it connects the market price to reported earnings.
Latest P/E ratio: 37.54x as of August 12, 2026.
A P/E ratio of 37.54x has to be judged against the company's five-year EPS CAGR of -8.55%. If the multiple is high while EPS support is ordinary, the valuation thesis becomes more dependent on investor confidence than on fresh earnings power.
PH price-to-sales Chart
Price-to-sales gives a second valuation lens when margins and earnings can move around the cycle.
Latest price-to-sales ratio: 6.36x.
Price-to-sales at 6.36x is most useful beside net margin of 16.97%. A richer sales multiple is easier to defend when margin quality is durable rather than temporarily elevated.
Market Price Sits Well Above Independent DCF Benchmark
The independent analyst DCF (FMP) model establishes a fair value benchmark of $697. Comparing the market price of $1,070 to this intrinsic value estimate reveals a negative margin of safety of -34.81%. This gap indicates that the market has priced in optimistic growth and margin assumptions that exceed the baseline expectations of third-party valuation models, highlighting the potential risk of multiple contraction if performance normalized.
The valuation at a glance
Each input on its own line: what the stock costs against earnings and sales, the model's fair value and how far price sits from it, and the growth and margins behind the business.
PH earnings yield Chart
Earnings yield reframes valuation from an owner's-yield perspective rather than a multiple perspective.
Latest earnings yield: 2.66%.
The earnings yield of 2.66% is the counterweight to the P/E ratio. If the yield is thin relative to the quality and growth profile, the valuation case needs more help from future compounding.
Operational Growth Accelerates Despite Long-Term Downward Trajectory
A long-term view of the company's financials shows a five-year revenue CAGR of -16.70% and a five-year EPS CAGR of -8.55%. However, these long-term historical metrics contrast with recent operational performance, which shows positive growth in revenue, EPS, net income, and free cash flow. This near-term operational momentum helps explain why the market is willing to pay a premium multiple, as investors focus on recent acceleration rather than long-term historical averages.
PH revenue
Revenue history tests whether the valuation is being supported by real business expansion.
Five-year revenue CAGR: -16.70%. This is endpoint-to-endpoint from the fiscal years shown — a depressed start year can inflate it, so read it against the recent bars.
Revenue growth is the business-expansion evidence behind the valuation read. A five-year revenue CAGR of -16.70% helps show how much of the valuation story is coming from company growth instead of only multiple expansion.
PH EPS
EPS history checks whether reported earnings are keeping pace with the market multiple.
Five-year EPS CAGR: -8.55%. This is endpoint-to-endpoint from the fiscal years shown — a depressed or negative start year can inflate it, so read it against the recent bars.
A five-year EPS CAGR of -8.55% is the clearest support figure for a P/E-based conclusion. If EPS growth slows while the multiple remains elevated, the article should become more cautious after refresh.
Structural Profitability Underpins Premium Sales Multiple
The company's premium price-to-sales ratio of 6.36x is supported by its strong profitability. With a net margin of 16.97%, the company demonstrates high conversion of revenue into net income. This level of profitability helps justify a higher sales multiple, as each dollar of revenue generates significant earnings. However, if macroeconomic pressures or rising input costs compress these margins, the current sales multiple would face downward pressure.
PH net margin
Net margin shows whether the company has enough profitability quality to support its valuation.
Net margin (TTM): 16.97%. The bars below are annual fiscal years.
Net margin of 16.97% is a quality signal, not a valuation verdict by itself. It matters because a premium multiple is more defensible when margins are structurally strong and less defensible when margins are peaking.
Weighing Cash Flow Strength Against Multiple Contraction Risks
The positive case for the current valuation rests on the company's strong operational execution, highlighted by rising near-term revenue, net income, and free cash flow, alongside a net margin of 16.97%. Conversely, the cautious view emphasizes that a trailing P/E of 37.54x leaves little room for error. With the stock trading above the analyst DCF (FMP) reference of $697, any deceleration in growth could trigger a re-rating of the stock.
Bull and bear case
Valuation support
- Five-year revenue CAGR of -16.70% and five-year EPS CAGR of -8.55% support the business case.
- Net margin of 16.97% is the quality check behind the multiple.
Valuation pressure
- A P/E ratio of 37.54x can become demanding if EPS growth slows.
- The analyst-DCF (FMP) margin of safety at -34.81% should change the valuation read if it deteriorates after refresh.
Key Metrics to Monitor for a Shift in the Valuation Thesis
Several factors could alter this valuation perspective. A key indicator is whether the market price moves closer to the analyst DCF (FMP) benchmark of $697. Additionally, any divergence in the current upward trend of revenue and EPS growth, or a decline in the net margin of 16.97%, would weaken the fundamental support for the company's premium multiple.
In conclusion, the valuation of Parker-Hannifin Corporation relies on continued strong operational performance. To support its premium market multiple and offset the negative margin of safety relative to the analyst DCF (FMP) model, the company must maintain its high profitability and positive growth trends. This analysis is based on historical financial filings and does not constitute personalized investment advice or a recommendation to buy or sell the security.
Final Read
The final read is that Parker-Hannifin Corporation needs valuation support from more than one place: the market multiple, the analyst-DCF (FMP) reference, growth, and margin quality all have to keep pointing in the same direction. Every figure in this research note is checked against data we compute and store from the company's reported filings. It is general research context only, not personalized investment advice or a buy or sell call.
FAQ
Is PH fairly valued?
Parker-Hannifin Corporation trades at 37.54x trailing earnings, while the price gap versus the third-party DCF (FMP) estimate is -34.81%. Read those references alongside five-year revenue CAGR of -16.70% and five-year EPS CAGR of -8.55%; none is a standalone verdict.
What valuation metric matters most for PH?
This article anchors on P/E, fair value, margin of safety, price-to-sales, earnings yield, revenue growth, and EPS growth. No single metric is treated as a recommendation.
How often should this PH valuation view refresh?
Numbers here are as of August 12, 2026 — the note's dated snapshot. A note whose figures can no longer be verified against the company's reported data is corrected or unpublished rather than left stale.
What would change our mind
- A material move away from the analyst-DCF (FMP) reference of $697.
- A break in five-year EPS support, currently -8.55%.
- Margin quality drifting away from the latest net margin of 16.97%.
The bottom line
Parker-Hannifin Corporation valuation research note from TGMCharts Research, grounded in a dated fundamentals snapshot, chart exhibits, and linked source facts.
Read next: PH fundamentalsContinue with Parker-Hannifin Corporation's full stock page.How we checked this researchShowHide
Data snapshot · By TGMCharts Research.
Every number in this note comes from data we compute and store ourselves from the company's reported figures, plus verbatim excerpts from its SEC filings. When a value isn't available we say so — we never fill gaps with estimates.
Latest filing excerpt
10-Q · filed 2026-05-01 · period 2026-03-31 · SEC EDGAR source
- “The effect of currency exchange rate changes increased net sales during the current-year quarter by approximately $125 million.”
- “The impact of the acquisition of Curtis increased net sales by approximately $76 million during the current-year quarter.”
- “The effect of currency exchange rate changes increased net sales during the first nine months of fiscal 2026 by approximately $242 million.”
- “The impact of divestiture activity decreased net sales by approximately $146 million during the first nine months of fiscal 2026.”
Source pages
Exhibit sources
Research trail
Every number, checked
Every numeric or dated claim in this note was checked against our stored company data before publishing — each figure below links to the page it comes from.