Abstract

Parker Hannifin will report its fiscal Q2 2026 results on January 29, 2026 Pre-Market. Based on company guidance and recent segment trends, consensus points to continued aerospace strength and a gradual industrial recovery, with adjusted EPS growth expected year over year.

Market Forecast

For the current fiscal quarter, Parker Hannifin’s market consensus indicates total revenue of $5.07 billion, a year-over-year increase of 5.47%, with EBIT estimated at $1.24 billion, up 12.92% year over year, and adjusted EPS projected at $7.17, up 15.08% year over year. While company-level gross margin and net margin guidance for this quarter have not been explicitly issued, last quarter’s mix and pricing imply a stable-to-improving margin profile, and the forecast suggests continued leverage on aerospace and disciplined cost control. The main business outlook centers on diversified industrial demand stabilizing and aerospace systems staying robust on commercial OEM and aftermarket momentum. The most promising segment is Aerospace Systems, supported by strong backlog and aftermarket activity, with last quarter revenue of $1.64 billion, up 13.30% year over year.

Last Quarter Review

Parker Hannifin’s previous fiscal quarter delivered total revenue of $5.08 billion, a gross profit margin of 37.69%, GAAP net profit attributable to the parent company of $808.00 million, a net profit margin of 15.89%, and adjusted EPS of $7.22, with adjusted EPS rising year over year. A notable highlight was margin expansion driven by aerospace mix and operational efficiencies, which helped offset softness in parts of the diversified industrial portfolio. Main business performance included Diversified Industrial revenue of $3.44 billion and Aerospace Systems revenue of $1.64 billion, with aerospace posting double-digit year-over-year growth and the industrial segment seeing early signs of order recovery.

Current Quarter Outlook

Diversified Industrial Segment

The diversified industrial segment is foundational to Parker Hannifin’s earnings power in fiscal Q2 2026, and the latest indicators point to stabilization with selective strength in end markets. Order trends in North America turned upward last quarter, while international operations showed modest growth, supporting a thesis of gradual demand recovery. Pricing discipline and productivity initiatives are expected to support margins, particularly given last quarter’s adjusted operating margin improvement in both North America and international. This quarter, watch for organic growth driven by motion and control solutions across factory automation, transportation, and energy, and for backlog conversion as order rates normalize. With last quarter revenue at $3.44 billion, management’s focus on operating excellence and cost containment should help protect gross margins around recent levels, even if volumes remain mixed. Integration synergies and portfolio optimization could add incremental margin gains, aiding EPS expansion relative to revenue growth. The segment’s performance will be closely tied to macro signals in industrial production and customer inventory behavior; any improvement in capital spending could amplify upside to revenue and EBIT.

Aerospace Systems Segment

Aerospace Systems remains the strongest momentum driver for Parker Hannifin in the current quarter, anchored by commercial OEM production and a resilient aftermarket. The segment posted last quarter revenue of $1.64 billion, up 13.30% year over year, supported by double-digit organic growth and improved adjusted operating margin. For fiscal Q2 2026, continued backlog execution and robust aftermarket demand should sustain high-single to low-double-digit growth, while margin tailwinds from mix and scale leverage remain intact. Airlines’ maintenance cycles and fleet modernization are feeding aftermarket needs, which tend to carry attractive profitability. If OEM schedules hold and supply-chain bottlenecks remain manageable, the segment could deliver outsized EBIT contribution relative to its revenue share. The durability of the aerospace cycle—especially in commercial—positions Parker Hannifin for continued EPS support, and any incremental strength in defense-related programs would further diversify the growth base. Investors should monitor any commentary on backlog conversion and aftermarket pricing, as those elements will influence the quarter’s gross margin trajectory.

Key Stock Price Drivers This Quarter

Earnings per share trajectory will be a central driver, with consensus at $7.17 indicating mid-teens growth and implying operating leverage if revenue meets or exceeds forecasts. Segment mix is equally important: stronger aerospace relative to industrial will generally favor margins and EBIT, while a more balanced mix could signal broad-based recovery but temper margin rate expansion. Cost execution—encompassing supply-chain efficiency, procurement, and productivity—will underpin gross margin stability, with last quarter’s 37.69% offering a benchmark. Revenue quality will matter as well, with aftermarket in aerospace and higher-margin industrial subsegments contributing to net profit margin resilience near the mid-teens. Guidance cadence for the remainder of fiscal 2026 could influence sentiment; affirmation or upward adjustments to full-year adjusted EPS and sales ranges would likely be taken positively. Finally, capital allocation—buybacks and disciplined M&A—could provide additional support to per-share metrics and the valuation narrative.

Analyst Opinions

The collected analyst commentary over the past six months shows a majority bullish stance on Parker Hannifin, with multiple Buy ratings and targets above recent trading levels, versus a minority of Hold ratings. Citi maintained a Buy rating with a price target of $1,074.00, reflecting confidence in sustained aerospace growth and improving industrial trends. Barclays reiterated Buy ratings with price targets of $906.00 on two occasions, highlighting margin durability and backlog-supported visibility. Susquehanna reaffirmed a Buy rating with a target of $860.00, pointing to resilience and strategic execution. Stifel Nicolaus maintained Hold ratings with targets in the $726.00 to $850.00 range, suggesting a more cautious view tied to valuation and integration assumptions, and TD Cowen held a cautious Hold with a $775.00 target linked to synergy uncertainty in a filtration-related acquisition. Overall, the majority consensus leans bullish, emphasizing aerospace strength, backlog conversion, and margin execution as core supports for the upcoming quarter’s EPS. In this context, the prevailing view anticipates results near or above the mid-teens EPS growth forecast and continued discipline around cost and pricing, reinforcing confidence into fiscal Q2 2026.