On Thursday, Wolfe Research altered its stance on Parker-Hannifin (NYSE:PH), upgrading the stock's rating from Peer Perform to Outperform, with a new price target set at $786.00.
The research firm indicated that Parker-Hannifin, which is known for its short-cycle industrial operations, could experience a significant uptick in sales growth compared to its Electrical Equipment and Multi-Industry (EE/MI) peers, given an inflecting ISM.
The analyst cited the company's inherent "DNA" as a short-cycle industrial entity as a key factor in this potential sales growth. They suggested that an upward turn in the Institute for Supply Management (ISM) index is likely to translate into Parker-Hannifin's lagging sales growth shifting to above-average when benchmarked against its competitors in the same sector.
Additionally, the firm pointed to positive EPS (earnings per share) momentum as a contributing factor to the upgrade. This momentum, along with an expanding scope for capital deployment, is expected to underpin and reinforce Parker-Hannifin's relative valuation in the market.
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