- Donaldson shares have significantly unperformed the industrial sector, but an improving revenue outlook is mitigating a lot of the short-term margin pressures the company is experiencing.
- In the short term, Donaldson is leveraged to a strong cycle in multiple off-highway commercial vehicle categories, while higher emissions standards can continue to drive on-highway growth.
- The "sizzle" to the Donaldson story is in the company's efforts to repurpose its core filtration technologies to new growth markets, including food/beverage and biopharma.
- Mid-single-digit revenue growth and modest margin leverage can support a fair value above $60.
For further details see:
Donaldson Deserves A Second Look After A Steep Decline