Intrinsic value of Parker Hannifin - PH

Previous Close

$210.94

  Intrinsic Value

$472.90

stock screener

  Rating & Target

str. buy

+124%

Previous close

$210.94

 
Intrinsic value

$472.90

 
Up/down potential

+124%

 
Rating

str. buy

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of PH stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  5.88
  22.70
  20.93
  19.34
  17.90
  16.61
  15.45
  14.41
  13.47
  12.62
  11.86
  11.17
  10.55
  10.00
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
Revenue, $m
  12,029
  14,760
  17,849
  21,300
  25,114
  29,286
  33,811
  38,682
  43,891
  49,429
  55,290
  61,467
  67,955
  74,749
  81,850
  89,257
  96,972
  105,002
  113,351
  122,030
  131,049
  140,422
  150,163
  160,288
  170,817
  181,769
  193,168
  205,035
  217,397
  230,281
  243,715
Variable operating expenses, $m
 
  9,924
  11,885
  14,075
  16,495
  19,142
  22,014
  25,104
  28,410
  31,924
  35,643
  39,004
  43,121
  47,433
  51,938
  56,638
  61,534
  66,629
  71,927
  77,435
  83,158
  89,105
  95,286
  101,711
  108,393
  115,343
  122,575
  130,106
  137,950
  146,126
  154,650
Fixed operating expenses, $m
 
  2,635
  2,701
  2,769
  2,838
  2,909
  2,982
  3,056
  3,133
  3,211
  3,291
  3,373
  3,458
  3,544
  3,633
  3,724
  3,817
  3,912
  4,010
  4,110
  4,213
  4,318
  4,426
  4,537
  4,650
  4,766
  4,886
  5,008
  5,133
  5,261
  5,393
Total operating expenses, $m
  10,701
  12,559
  14,586
  16,844
  19,333
  22,051
  24,996
  28,160
  31,543
  35,135
  38,934
  42,377
  46,579
  50,977
  55,571
  60,362
  65,351
  70,541
  75,937
  81,545
  87,371
  93,423
  99,712
  106,248
  113,043
  120,109
  127,461
  135,114
  143,083
  151,387
  160,043
Operating income, $m
  1,329
  2,200
  3,263
  4,457
  5,781
  7,235
  8,816
  10,521
  12,348
  14,294
  16,356
  19,090
  21,376
  23,773
  26,279
  28,895
  31,622
  34,460
  37,414
  40,485
  43,679
  46,998
  50,450
  54,040
  57,774
  61,660
  65,707
  69,921
  74,314
  78,894
  83,672
EBITDA, $m
  1,684
  2,952
  4,055
  5,294
  6,668
  8,177
  9,817
  11,586
  13,481
  15,500
  17,638
  19,894
  22,265
  24,751
  27,350
  30,063
  32,890
  35,834
  38,897
  42,082
  45,393
  48,836
  52,415
  56,137
  60,009
  64,039
  68,234
  72,604
  77,158
  81,907
  86,861
Interest expense (income), $m
  132
  173
  247
  331
  424
  527
  640
  763
  895
  1,036
  1,186
  1,345
  1,512
  1,687
  1,871
  2,064
  2,264
  2,473
  2,691
  2,917
  3,152
  3,396
  3,650
  3,913
  4,187
  4,473
  4,769
  5,078
  5,399
  5,734
  6,083
Earnings before tax, $m
  1,329
  2,027
  3,016
  4,126
  5,357
  6,707
  8,175
  9,758
  11,454
  13,258
  15,170
  17,745
  19,864
  22,085
  24,408
  26,831
  29,357
  31,987
  34,723
  37,569
  40,527
  43,603
  46,801
  50,127
  53,587
  57,188
  60,938
  64,844
  68,915
  73,160
  77,589
Tax expense, $m
  345
  547
  814
  1,114
  1,446
  1,811
  2,207
  2,635
  3,092
  3,580
  4,096
  4,791
  5,363
  5,963
  6,590
  7,244
  7,926
  8,637
  9,375
  10,144
  10,942
  11,773
  12,636
  13,534
  14,468
  15,441
  16,453
  17,508
  18,607
  19,753
  20,949
Net income, $m
  983
  1,480
  2,202
  3,012
  3,911
  4,896
  5,968
  7,124
  8,361
  9,679
  11,074
  12,954
  14,501
  16,122
  17,818
  19,587
  21,431
  23,351
  25,348
  27,425
  29,585
  31,830
  34,164
  36,592
  39,118
  41,747
  44,484
  47,336
  50,308
  53,407
  56,640

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  924
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  15,490
  17,869
  21,609
  25,787
  30,404
  35,455
  40,933
  46,830
  53,136
  59,842
  66,937
  74,415
  82,270
  90,496
  99,092
  108,059
  117,400
  127,121
  137,229
  147,736
  158,655
  170,002
  181,795
  194,053
  206,800
  220,060
  233,859
  248,227
  263,193
  278,790
  295,054
Adjusted assets (=assets-cash), $m
  14,566
  17,869
  21,609
  25,787
  30,404
  35,455
  40,933
  46,830
  53,136
  59,842
  66,937
  74,415
  82,270
  90,496
  99,092
  108,059
  117,400
  127,121
  137,229
  147,736
  158,655
  170,002
  181,795
  194,053
  206,800
  220,060
  233,859
  248,227
  263,193
  278,790
  295,054
Revenue / Adjusted assets
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
  0.826
Average production assets, $m
  3,368
  4,133
  4,998
  5,964
  7,032
  8,200
  9,467
  10,831
  12,289
  13,840
  15,481
  17,211
  19,027
  20,930
  22,918
  24,992
  27,152
  29,400
  31,738
  34,168
  36,694
  39,318
  42,046
  44,881
  47,829
  50,895
  54,087
  57,410
  60,871
  64,479
  68,240
Working capital, $m
  1,384
  1,801
  2,178
  2,599
  3,064
  3,573
  4,125
  4,719
  5,355
  6,030
  6,745
  7,499
  8,290
  9,119
  9,986
  10,889
  11,831
  12,810
  13,829
  14,888
  15,988
  17,131
  18,320
  19,555
  20,840
  22,176
  23,566
  25,014
  26,522
  28,094
  29,733
Total debt, $m
  5,870
  7,060
  9,450
  12,120
  15,070
  18,298
  21,798
  25,567
  29,596
  33,881
  38,415
  43,193
  48,212
  53,469
  58,962
  64,692
  70,661
  76,872
  83,331
  90,045
  97,023
  104,273
  111,809
  119,642
  127,787
  136,260
  145,078
  154,259
  163,822
  173,789
  184,182
Total liabilities, $m
  10,228
  11,418
  13,808
  16,478
  19,428
  22,656
  26,156
  29,925
  33,954
  38,239
  42,773
  47,551
  52,570
  57,827
  63,320
  69,050
  75,019
  81,230
  87,689
  94,403
  101,381
  108,631
  116,167
  124,000
  132,145
  140,618
  149,436
  158,617
  168,180
  178,147
  188,540
Total equity, $m
  5,262
  6,451
  7,801
  9,309
  10,976
  12,799
  14,777
  16,906
  19,182
  21,603
  24,164
  26,864
  29,699
  32,669
  35,772
  39,009
  42,381
  45,891
  49,540
  53,333
  57,275
  61,371
  65,628
  70,053
  74,655
  79,442
  84,423
  89,610
  95,013
  100,643
  106,515
Total liabilities and equity, $m
  15,490
  17,869
  21,609
  25,787
  30,404
  35,455
  40,933
  46,831
  53,136
  59,842
  66,937
  74,415
  82,269
  90,496
  99,092
  108,059
  117,400
  127,121
  137,229
  147,736
  158,656
  170,002
  181,795
  194,053
  206,800
  220,060
  233,859
  248,227
  263,193
  278,790
  295,055
Debt-to-equity ratio
  1.116
  1.090
  1.210
  1.300
  1.370
  1.430
  1.480
  1.510
  1.540
  1.570
  1.590
  1.610
  1.620
  1.640
  1.650
  1.660
  1.670
  1.680
  1.680
  1.690
  1.690
  1.700
  1.700
  1.710
  1.710
  1.720
  1.720
  1.720
  1.720
  1.730
  1.730
Adjusted equity ratio
  0.298
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361
  0.361

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  983
  1,480
  2,202
  3,012
  3,911
  4,896
  5,968
  7,124
  8,361
  9,679
  11,074
  12,954
  14,501
  16,122
  17,818
  19,587
  21,431
  23,351
  25,348
  27,425
  29,585
  31,830
  34,164
  36,592
  39,118
  41,747
  44,484
  47,336
  50,308
  53,407
  56,640
Depreciation, amort., depletion, $m
  355
  752
  792
  837
  887
  942
  1,001
  1,065
  1,133
  1,205
  1,282
  804
  889
  978
  1,071
  1,168
  1,269
  1,374
  1,483
  1,597
  1,715
  1,837
  1,965
  2,097
  2,235
  2,378
  2,527
  2,683
  2,844
  3,013
  3,189
Funds from operations, $m
  1,181
  2,231
  2,994
  3,849
  4,798
  5,838
  6,969
  8,188
  9,494
  10,884
  12,356
  13,758
  15,390
  17,100
  18,888
  20,755
  22,700
  24,725
  26,831
  29,022
  31,299
  33,667
  36,129
  38,690
  41,353
  44,125
  47,012
  50,019
  53,152
  56,420
  59,829
Change in working capital, $m
  -121
  333
  377
  421
  465
  509
  552
  594
  635
  676
  715
  754
  791
  829
  866
  904
  941
  980
  1,019
  1,059
  1,100
  1,143
  1,188
  1,235
  1,285
  1,336
  1,391
  1,448
  1,508
  1,572
  1,639
Cash from operations, $m
  1,302
  1,898
  2,617
  3,428
  4,333
  5,329
  6,417
  7,594
  8,859
  10,208
  11,641
  13,005
  14,599
  16,271
  18,022
  19,851
  21,758
  23,745
  25,812
  27,963
  30,199
  32,524
  34,941
  37,454
  40,069
  42,789
  45,621
  48,571
  51,644
  54,848
  58,190
Maintenance CAPEX, $m
  0
  -157
  -193
  -234
  -279
  -329
  -383
  -442
  -506
  -574
  -647
  -723
  -804
  -889
  -978
  -1,071
  -1,168
  -1,269
  -1,374
  -1,483
  -1,597
  -1,715
  -1,837
  -1,965
  -2,097
  -2,235
  -2,378
  -2,527
  -2,683
  -2,844
  -3,013
New CAPEX, $m
  -204
  -765
  -865
  -966
  -1,068
  -1,168
  -1,267
  -1,364
  -1,458
  -1,551
  -1,641
  -1,730
  -1,817
  -1,903
  -1,988
  -2,074
  -2,160
  -2,248
  -2,338
  -2,430
  -2,525
  -2,624
  -2,727
  -2,835
  -2,948
  -3,067
  -3,191
  -3,323
  -3,461
  -3,607
  -3,761
Cash from investing activities, $m
  -3,365
  -922
  -1,058
  -1,200
  -1,347
  -1,497
  -1,650
  -1,806
  -1,964
  -2,125
  -2,288
  -2,453
  -2,621
  -2,792
  -2,966
  -3,145
  -3,328
  -3,517
  -3,712
  -3,913
  -4,122
  -4,339
  -4,564
  -4,800
  -5,045
  -5,302
  -5,569
  -5,850
  -6,144
  -6,451
  -6,774
Free cash flow, $m
  -2,063
  976
  1,559
  2,228
  2,986
  3,832
  4,767
  5,788
  6,894
  8,083
  9,353
  10,552
  11,978
  13,480
  15,056
  16,706
  18,430
  20,228
  22,101
  24,050
  26,077
  28,185
  30,376
  32,654
  35,023
  37,488
  40,052
  42,721
  45,500
  48,396
  51,415
Issuance/(repayment) of debt, $m
  2,464
  2,114
  2,390
  2,670
  2,950
  3,228
  3,501
  3,768
  4,030
  4,285
  4,534
  4,778
  5,019
  5,257
  5,493
  5,730
  5,969
  6,211
  6,459
  6,714
  6,977
  7,251
  7,535
  7,833
  8,145
  8,473
  8,818
  9,181
  9,563
  9,967
  10,393
Issuance/(repurchase) of shares, $m
  -336
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,128
  2,114
  2,390
  2,670
  2,950
  3,228
  3,501
  3,768
  4,030
  4,285
  4,534
  4,778
  5,019
  5,257
  5,493
  5,730
  5,969
  6,211
  6,459
  6,714
  6,977
  7,251
  7,535
  7,833
  8,145
  8,473
  8,818
  9,181
  9,563
  9,967
  10,393
Total cash flow (excl. dividends), $m
  8
  3,090
  3,949
  4,898
  5,936
  7,060
  8,267
  9,556
  10,924
  12,368
  13,887
  15,330
  16,997
  18,736
  20,549
  22,436
  24,399
  26,439
  28,560
  30,764
  33,054
  35,435
  37,912
  40,488
  43,169
  45,961
  48,869
  51,901
  55,063
  58,363
  61,808
Retained Cash Flow (-), $m
  -687
  -1,189
  -1,350
  -1,508
  -1,667
  -1,823
  -1,978
  -2,129
  -2,277
  -2,421
  -2,562
  -2,700
  -2,835
  -2,970
  -3,103
  -3,237
  -3,372
  -3,509
  -3,649
  -3,793
  -3,942
  -4,096
  -4,257
  -4,425
  -4,602
  -4,787
  -4,982
  -5,187
  -5,403
  -5,631
  -5,871
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,902
  2,599
  3,390
  4,270
  5,237
  6,290
  7,427
  8,647
  9,947
  11,326
  12,630
  14,161
  15,767
  17,446
  19,199
  21,027
  22,930
  24,911
  26,971
  29,113
  31,339
  33,654
  36,062
  38,567
  41,174
  43,888
  46,715
  49,661
  52,732
  55,937
Discount rate, %
 
  6.90
  7.25
  7.61
  7.99
  8.39
  8.81
  9.25
  9.71
  10.19
  10.70
  11.24
  11.80
  12.39
  13.01
  13.66
  14.34
  15.06
  15.81
  16.61
  17.44
  18.31
  19.22
  20.18
  21.19
  22.25
  23.37
  24.53
  25.76
  27.05
  28.40
PV of cash for distribution, $m
 
  1,779
  2,259
  2,721
  3,140
  3,501
  3,791
  3,999
  4,120
  4,152
  4,097
  3,914
  3,713
  3,453
  3,148
  2,812
  2,462
  2,111
  1,773
  1,456
  1,170
  918
  703
  525
  383
  271
  187
  125
  81
  51
  31
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Parker-Hannifin Corporation is a manufacturer of motion and control technologies and systems, providing precision engineered solutions for a range of mobile, industrial and aerospace markets. The Company operates through segments: Diversified Industrial and Aerospace Systems. The Diversified Industrial Segment is an aggregation of several business units, which manufacture motion-control and fluid power system components for builders and users of various types of manufacturing, packaging, processing, transportation, agricultural, construction, and military vehicles and equipment. The Diversified Industrial Segment consists of Automation Group, Engineered Materials Group, Filtration Group, Fluid Connectors Group, Hydraulics Group and Instrumentation Group. The Aerospace Systems Segment produces hydraulic, fuel, pneumatic and electro-mechanical systems and components, which are utilized on domestic commercial, military and general aviation aircrafts.

FINANCIAL RATIOS  of  Parker Hannifin (PH)

Valuation Ratios
P/E Ratio 28.6
Price to Sales 2.3
Price to Book 5.3
Price to Tangible Book
Price to Cash Flow 21.6
Price to Free Cash Flow 25.6
Growth Rates
Sales Growth Rate 5.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 36.9%
Cap. Spend. - 3 Yr. Gr. Rate -1.1%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 92.4%
Total Debt to Equity 111.6%
Interest Coverage 11
Management Effectiveness
Return On Assets 7.9%
Ret/ On Assets - 3 Yr. Avg. 7.9%
Return On Total Capital 10.5%
Ret/ On T. Cap. - 3 Yr. Avg. 10.9%
Return On Equity 20%
Return On Equity - 3 Yr. Avg. 18%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 23.9%
Gross Margin - 3 Yr. Avg. 23.7%
EBITDA Margin 15.1%
EBITDA Margin - 3 Yr. Avg. 14.5%
Operating Margin 11%
Oper. Margin - 3 Yr. Avg. 10.7%
Pre-Tax Margin 11%
Pre-Tax Margin - 3 Yr. Avg. 10.7%
Net Profit Margin 8.2%
Net Profit Margin - 3 Yr. Avg. 7.7%
Effective Tax Rate 26%
Eff/ Tax Rate - 3 Yr. Avg. 27.6%
Payout Ratio 35.1%

PH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PH stock intrinsic value calculation we used $12029 million for the last fiscal year's total revenue generated by Parker Hannifin. The default revenue input number comes from 2017 income statement of Parker Hannifin. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our PH stock valuation model: a) initial revenue growth rate of 22.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.9%, whose default value for PH is calculated based on our internal credit rating of Parker Hannifin, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Parker Hannifin.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of PH stock the variable cost ratio is equal to 68.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2571 million in the base year in the intrinsic value calculation for PH stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Parker Hannifin.

Corporate tax rate of 27% is the nominal tax rate for Parker Hannifin. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the PH stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for PH are equal to 28%.

Life of production assets of 21.4 years is the average useful life of capital assets used in Parker Hannifin operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for PH is equal to 12.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5262 million for Parker Hannifin - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 132.979 million for Parker Hannifin is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Parker Hannifin at the current share price and the inputted number of shares is $28.1 billion.

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DOV Dover 104.41 280.59  str.buy

COMPANY NEWS

▶ Parker-Hannifin Is Pounding Out Singles   [08:31AM  TheStreet.com]
▶ Composite Rating For Parker-Hannifin Rises To 96   [Dec-14-17 03:00AM  Investor's Business Daily]
▶ 36 Top Funds Just Bought Shares In This Potential Breakout Stock   [Dec-12-17 04:08PM  Investor's Business Daily]
▶ Raise Stops to Lock in Gains on Parker Hannifin   [Dec-05-17 12:42PM  TheStreet.com]
▶ New Strong Buy Stocks for November 30th   [Nov-30-17 08:01AM  Zacks]
▶ Parker-Hannifin Sees Its Composite Rating Rise To 96   [03:00AM  Investor's Business Daily]
▶ Parker-Hannifin beats Street 1Q forecasts   [Nov-02-17 07:51AM  Associated Press]
▶ Parker Declares Quarterly Cash Dividend   [Oct-25-17 05:05PM  GlobeNewswire]
▶ Parkers New GlobalCore 187 High Performance Hydraulic Hose   [Oct-09-17 06:06PM  Business Wire]
▶ [$$] U.S. Challenges Parker Hannifin's Acquisition of Clarcor   [Sep-26-17 07:53PM  The Wall Street Journal]
▶ Stocks Flashing Renewed Technical Strength: Parker-Hannifin   [Sep-19-17 03:00AM  Investor's Business Daily]
▶ IBD Rating Upgrades: Parker-Hannifin Shows Improved Technical Strength   [Sep-11-17 03:00AM  Investor's Business Daily]
▶ Stocks With Rising Relative Strength: Parker-Hannifin   [03:00AM  Investor's Business Daily]
▶ Parker Declares Quarterly Cash Dividend   [Aug-17-17 05:05PM  GlobeNewswire]
▶ Parker-Hannifin beats 4Q profit forecasts   [Aug-03-17 05:35PM  Associated Press]
▶ Plant shut down means 200 layoffs in eastern N.C.   [08:59AM  American City Business Journals]
▶ Motion Control Industrial Stock May Pump Up New Breakout   [Jul-11-17 04:30PM  Investor's Business Daily]
Financial statements of PH
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