Parker Hannifin Corporation
) has been assiduously expanding its market share, especially in
the emerging economies and business portfolio over time despite
facing the ongoing difficult macro-economic conditions. Acquisition
of a number of private labels paved the way for such a business
expansion; the latest on its record being PIX Transmissions Ltd. in
Post acquisition, Parker's Fluid Connectors Group will conflate
with PIX Transmissions' hydraulics manufacturing business, and it
will be regarded as a unit of the company's International
Industrial Segment. However, the financial terms and conditions of
the agreement were not unveiled.
The agreement is seen as a positive aspect for the company's
manufacturing business which is expected to eminently strengthen
Parker's businesses in India and bolster its performances quite
comprehensively. Besides, the acquisition will also help the
company in augmenting its product base.
The previous acquisition of John Fowler (India) Private Limited
by Parker is also likely to have a positive impact on the company's
growth prospects in the emerging markets. Earlier, in the third
quarter of fiscal 2012, the company witnessed about 4.7%
augmentation in net sales from the year-ago quarter. Net income for
the quarter also came in at $312.7 million, up 11.0% from the prior
We believe Parker stands in a favorable position to benefit from
new business wins, tremendous geographical diversification and
product mix. Furthermore, the company's strong consumer insight is
likely to support its growth momentum.However, it faces fierce
competition from its peers such as
DXP Enterprises, Inc.
The current Zacks Consensus Estimate for the fourth quarter of
2012 is $1.93, reflecting a year-over-year growth of 8.01%.
Estimates for the fiscal year 2012 and 2013 are $7.41 and $7.98,
representing annual growth of 16.33% and 7.64%, respectively. We
currently maintain a 'Neutral' recommendation on Parker. The stock
carries a Zacks #3 Rank, translating into a short-term (1-3 months)
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PARKER HANNIFIN (PH): Free Stock Analysis
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