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Is Now The Time To Look At Buying Parker-Hannifin Corporation (NYSE:PH)?

Simply Wall St

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Let's talk about the popular Parker-Hannifin Corporation (NYSE:PH). The company's shares received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $189.93 at one point, and dropping to the lows of $152.32. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Parker-Hannifin's current trading price of $163.42 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Parker-Hannifin’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Parker-Hannifin

Is Parker-Hannifin still cheap?

Good news, investors! Parker-Hannifin is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $243.11, but it is currently trading at US$163 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Parker-Hannifin’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Parker-Hannifin generate?

NYSE:PH Past and Future Earnings, July 12th 2019

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by a double-digit 13% over the next couple of years, the outlook is positive for Parker-Hannifin. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since PH is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on PH for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PH. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Parker-Hannifin. You can find everything you need to know about Parker-Hannifin in the latest infographic research report. If you are no longer interested in Parker-Hannifin, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.