Donaldson (NYSE:DCI) Announces Quarterly Earnings Results

Donaldson (NYSE:DCI) announced its quarterly earnings results on Thursday. The industrial products company reported $0.83 EPS for the quarter, missing analysts’ consensus estimates of $0.90 by ($0.07), FiscalAI reports. The business had revenue of $896.30 million during the quarter, compared to the consensus estimate of $898.64 million. Donaldson had a net margin of 10.25% and a return on equity of 30.24%. The firm’s revenue was up 3.0% on a year-over-year basis. During the same period in the previous year, the business posted $0.83 EPS. Donaldson updated its FY 2026 guidance to 3.930-4.010 EPS.

Here are the key takeaways from Donaldson’s conference call:

• Donaldson reported record Q2 sales of $896 million (+3%) and reaffirmed a fiscal‑2026 outlook for ~$3.8 billion in sales with record operating margin and a midpoint EPS of $3.97, supported by ~90% free cash flow conversion.
• The company announced its largest-ever acquisition, Facet (~$110M revenue, ~70% recurring replacement sales) which management says has higher margins, low capex, is expected to close in the next quarters and be earnings‑accretive within ~two years.
• Q2 gross margin fell to 33.7% (-150 bps) and operating margin to 14% (from 15.2%) due to volume deleverage, a problematic ramp of large turbine production in Mexico (~40 bps headwind) and footprint optimization costs (~30 bps), prompting a ~30 bp reduction to midpoint operating margin guidance.
• Segment strength is mixed but promising: Life Sciences grew 16% led by food & beverage and Disk Drive (HAMR/gas‑absorption filters), while Mobile Solutions saw robust independent aftermarket and China growth (+18%), offsetting weaker OE volumes.

Donaldson Stock Up 0.4%

NYSE:DCI traded up $0.37 during mid-day trading on Friday, hitting $92.54. 758,612 shares of the company’s stock traded hands, compared to its average volume of 768,663. The company has a fifty day moving average of $100.00 and a 200 day moving average of $89.10. The company has a debt-to-equity ratio of 0.44, a quick ratio of 1.39 and a current ratio of 2.15. Donaldson has a twelve month low of $57.45 and a twelve month high of $112.84. The company has a market capitalization of $10.67 billion, a P/E ratio of 28.85, a P/E/G ratio of 2.58 and a beta of 1.00.

Donaldson Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Friday, February 27th. Investors of record on Thursday, February 12th will be paid a dividend of $0.30 per share. This represents a $1.20 annualized dividend and a yield of 1.3%. The ex-dividend date is Thursday, February 12th. Donaldson’s payout ratio is 37.38%.

Analyst Upgrades and Downgrades

Several research analysts have commented on DCI shares. Jefferies Financial Group lifted their price objective on shares of Donaldson to $123.00 and gave the stock a “buy” rating in a research note on Monday, February 2nd. Stifel Nicolaus lifted their price target on shares of Donaldson from $90.00 to $96.00 and gave the company a “hold” rating in a research note on Friday, December 5th. Weiss Ratings reissued a “buy (b)” rating on shares of Donaldson in a research report on Friday, January 9th. UBS Group set a $96.00 price objective on Donaldson in a report on Tuesday. Finally, Morgan Stanley raised shares of Donaldson from an “underweight” rating to an “equal weight” rating and raised their target price for the company from $72.00 to $84.00 in a research report on Monday, November 24th. Three research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company. According to MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average target price of $100.60.

Insider Transactions at Donaldson

In related news, Director Ajita G. Rajendra sold 19,800 shares of Donaldson stock in a transaction that occurred on Friday, December 5th. The shares were sold at an average price of $92.04, for a total value of $1,822,392.00. Following the completion of the sale, the director directly owned 43,993 shares in the company, valued at $4,049,115.72. This trade represents a 31.04% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, CFO Bradley J. Pogalz sold 566 shares of the business’s stock in a transaction that occurred on Tuesday, December 9th. The stock was sold at an average price of $91.57, for a total transaction of $51,828.62. Following the sale, the chief financial officer directly owned 434 shares in the company, valued at approximately $39,741.38. This represents a 56.60% decrease in their position. The SEC filing for this sale provides additional information. 2.20% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Donaldson

Several institutional investors and hedge funds have recently made changes to their positions in DCI. Strive Financial Group LLC acquired a new position in shares of Donaldson in the 4th quarter valued at $57,000. UMB Bank n.a. grew its stake in Donaldson by 47.9% during the 4th quarter. UMB Bank n.a. now owns 1,115 shares of the industrial products company’s stock valued at $99,000 after purchasing an additional 361 shares during the last quarter. Northwestern Mutual Wealth Management Co. increased its holdings in shares of Donaldson by 389.1% in the third quarter. Northwestern Mutual Wealth Management Co. now owns 1,389 shares of the industrial products company’s stock valued at $114,000 after purchasing an additional 1,105 shares during the period. Quarry LP raised its stake in shares of Donaldson by 23.4% in the third quarter. Quarry LP now owns 1,671 shares of the industrial products company’s stock worth $137,000 after purchasing an additional 317 shares during the last quarter. Finally, EverSource Wealth Advisors LLC lifted its holdings in shares of Donaldson by 84.9% during the second quarter. EverSource Wealth Advisors LLC now owns 2,032 shares of the industrial products company’s stock worth $141,000 after purchasing an additional 933 shares during the period. 82.81% of the stock is currently owned by institutional investors and hedge funds.

Key Stories Impacting Donaldson

Here are the key news stories impacting Donaldson this week:

• Positive Sentiment: FY2026 sales outlook includes up to mid-single-digit growth, giving a clear revenue-growth target and some support for the top line. Donaldson’s Q2 Earnings Miss Estimates, Revenues Increase Y/Y
• Positive Sentiment: Management will present at the Raymond James Institutional Investors Conference (Mar 4), offering an opportunity for investor Q&A that could clarify near-term demand and margin recovery plans. Donaldson Company to Present at Raymond James Conference
• Neutral Sentiment: Revenue rose ~3% year-over-year to roughly $896M, broadly in line with prior expectations but slightly shy of some estimates; top-line growth is steady but not accelerating. Donaldson Reports Second Quarter Fiscal Year 2026 Sales and Earnings
• Neutral Sentiment: Q2 earnings call transcript and materials are available; management acknowledged aftermarket softness and margin headwinds — useful for investors wanting detail on segment dynamics. Q2 2026 Earnings Call Transcript
• Negative Sentiment: Q2 EPS missed consensus (reported ~$0.78–0.83 vs. ~$0.90 expected) and margins compressed across segments; management trimmed FY26 EPS guidance slightly below consensus — the core reason for selling pressure. Shares sink after revenue miss, lowered profit outlook
• Negative Sentiment: The Facet Filtration acquisition raised net leverage (management cited ~1.8–2.0x); accretion is expected later (FY2027), increasing near-term execution and integration risk. Analysis: acquisition and margin concerns
• Negative Sentiment: Analysts have trimmed targets (e.g., Robert W. Baird cut its price target to $104) and short interest rose ~25% in February, signaling increased bearish positioning and potential selling pressure. Analyst price target change

About Donaldson

Donaldson Company, Inc (NYSE: DCI) is a global provider of filtration systems and replacement parts for a wide range of industries. The company develops and manufactures air, liquid and gas filtration solutions for engine and industrial applications, helping customers improve performance, lower emissions and extend equipment life. Donaldson’s product portfolio includes engine air intake filters, fuel filters, hydraulic filters, compressor filters, dust collection systems and gas turbine air intake systems.

Serving markets such as agriculture, construction, mining, power generation, aerospace and original equipment manufacturing, Donaldson operates through two primary business segments: Engine Products and Industrial Products.