) has sprung a leak as it has missed its last two earnings reports.
Today it is a Zacks Rank #5 (Strong Sell), and is the Bear of the
Filtering the Noise
The company provides filters for engines for both on and off road
as well as the Aerospace and Defense Industry. The engine segment
represents ~63% of the total sale while the industrial unit
accounts for 37% of sales.
Donaldson Company is a worldwide manufacturer of filtration systems
and replacement parts. The Company's product mix includes air and
liquid filtration systems and exhaust and emission control
products. The Company operates in two segments: Engine Products and
Two Misses And A Meet
It was back to the October 2012 quarter, if you are looking for the
last time that the company posted a positive earnings surprise.
Since that time there have been two negative earnings surprises and
previous to the two misses there was a one earnings meet.
Projected Earnings Growth Drops
The Zacks Consensus Estimate has seen a decline over the past
several month for 2013 and 2014. In January of 2013, the consensus
stood at $1.77 but has trended lower to the current level of $1.61.
That same can be said of 2014, with Estimate sliding from $1.98 to
$1.83 over the same time horizons.
The valuation picture for DCI shows some mild premiums to the
market, and at least one discount. The trailing PE of 23x is just
below the 25x industry average. The Forward PE of 23x is slightly
higher than the 20.6x industry average. The price to book is more
than double the industry average while price to sales also come in
high of the mark. For the most part, the premium given shares of
DCI may not be warranted and other competitors might how more
A quick look at the price and consensus shows that company has seen
its estimates trend lower of late. While there was earnings growth
in 2010-2012, 2013 has been challenging for this stock. There could
be better plays if you are looking for filter exposure.
Brian Bolan is a Stock Strategist for Zacks.com. He is the Editor
in charge of the
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