Parker-Hannifin Corporation PH recently completed its previously announced acquisition of Meggitt PLC for approximately £6.3 billion. Meggitt is a UK-based company specializing in components and sub-systems for the aerospace, defense and energy markets.
The acquisition expands Parker-Hannifin’s presence in the UK, positioning it well to provide a broader suite of solutions for aircraft, and aeroengine components and systems.
The transaction is expected to increase organic growth, generate a higher cash flow and boost earnings per share (excluding one-time costs and deal-related amortization) for PH, thus driving significant value creation for its shareholders.
ParkerHannifin Corporation Price
ParkerHannifin Corporation price | ParkerHannifin Corporation Quote
The Meggitt acquisition will add complementary technologies to Parker-Hannifin’s network and increase the aftermarket mix through recurring revenue. The buyout strengthens PH’s motion & control technologies offerings in the aerospace and defense end markets.
The acquisition is aligned with Parker-Hannifin’s Win Strategy, which focuses on innovation, strategic positioning, distribution growth and incentive plan changes to drive organic growth. The Win strategy is supporting the company’s margin expansion.
PH’s measures to transform its portfolio by adding more resilient businesses should drive its top line. The company strengthened its business portfolio through the acquisition of Exotic Metals Forming Company and LORD Corporation in fiscal 2020.
Zacks Rank & Key Picks
Parker-Hannifin presently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks within the broader Industrial Products sector are as follows:
Lindsay Corporation LNN currently sports a Zacks Rank #1 (Strong Buy). LNN pulled off a trailing four-quarter earnings surprise of 25.6%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
Lindsay has an estimated earnings growth rate of 45% for the current year. Shares of the company have gained 2% in the past six months.
Valmont Industries VMI presently sports a Zacks Rank #1. VMI pulled off a trailing four-quarter earnings surprise of 13.7%, on average.
Valmont Industries has an estimated earnings growth rate of 26.9% for the current year. Shares of the company have jumped 15.5% in the past six months.
Greif, Inc. GEF presently carries a Zacks Rank #2 (Buy). GEF delivered a trailing four-quarter earnings surprise of 22.4%, on average.
Greif has an estimated earnings growth rate of 43% for the current year. Shares of the company have appreciated 7.8% in the past six months.
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