Donaldson (NYSE:DCI) Releases Quarterly Earnings Results, Misses Expectations By $0.07 EPS

Donaldson (NYSE:DCI) issued its quarterly earnings results on Thursday. The industrial products company reported $0.83 EPS for the quarter, missing the consensus estimate of $0.90 by ($0.07), FiscalAI reports. Donaldson had a return on equity of 30.34% and a net margin of 10.09%.The business had revenue of $896.30 million for the quarter, compared to analyst estimates of $898.64 million. During the same quarter in the prior year, the firm earned $0.83 EPS. The firm’s quarterly revenue was up 3.0% compared to the same quarter last year. 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 Trading Up 0.7%

NYSE DCI opened at $92.84 on Friday. Donaldson has a one year low of $57.45 and a one year high of $112.84. The company has a debt-to-equity ratio of 0.44, a current ratio of 2.15 and a quick ratio of 1.39. The firm has a market cap of $10.71 billion, a P/E ratio of 29.01, a P/E/G ratio of 2.32 and a beta of 1.00. The stock’s 50-day moving average is $100.00 and its 200-day moving average is $89.25.

Donaldson Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Friday, February 27th. Stockholders of record on Thursday, February 12th were given a dividend of $0.30 per share. The ex-dividend date of this dividend was Thursday, February 12th. This represents a $1.20 dividend on an annualized basis and a dividend yield of 1.3%. Donaldson’s dividend payout ratio (DPR) is currently 37.38%.

Analysts Set New Price Targets

A number of analysts have commented on DCI shares. Morgan Stanley raised shares of Donaldson from an “underweight” rating to an “equal weight” rating and lifted their target price for the stock from $72.00 to $84.00 in a report on Monday, November 24th. Stifel Nicolaus lifted their price objective on Donaldson from $90.00 to $96.00 and gave the stock a “hold” rating in a research note on Friday, December 5th. Robert W. Baird cut their target price on Donaldson from $110.00 to $104.00 and set an “outperform” rating on the stock in a research note on Friday. Weiss Ratings restated a “buy (b)” rating on shares of Donaldson in a report on Friday, January 9th. Finally, Jefferies Financial Group boosted their target price on Donaldson to $123.00 and gave the stock a “buy” rating in a research report on Monday, February 2nd. Three analysts have rated the stock with a Buy rating and two have given a Hold rating to the company. According to data from MarketBeat.com, the company has a consensus rating of “Moderate Buy” and a consensus price target of $100.60.

Key Headlines Impacting Donaldson

Here are the key news stories impacting Donaldson this week:

• Positive Sentiment: Q2 revenue grew ~3% year‑over‑year and management set FY‑2026 sales guidance that implies up to ~5% organic sales growth, giving investors some top‑line visibility. Donaldson’s Q2 Earnings Miss Estimates, Revenues Increase Y/Y
• Neutral Sentiment: Management will present at the Raymond James Institutional Investors Conference on March 4, giving investors an opportunity for direct Q&A and more color on demand and margins. Donaldson Company to Present at the Raymond James 47th Annual Institutional Investors Conference
• Neutral Sentiment: Robert W. Baird trimmed its price target from $110 to $104 but kept an Outperform rating — a slight analytical downgrade but still constructive relative to the market. Price target lowered by Robert W. Baird
• Negative Sentiment: Q2 EPS missed consensus (reported ~$0.78–0.83 vs. ~$0.90 expected) and margins compressed, driven by cost/inflation and weaker aftermarket demand — the primary catalyst for the selloff. Donaldson Company, Inc. Q2 2026 Earnings Call Transcript
• Negative Sentiment: Management trimmed EPS guidance for FY‑2026 (guidance band modestly below consensus), and commentary flagged softer demand after tariff front‑loading — investors reacted to the lowered profit outlook. Donaldson shares sink after revenue miss, lowered profit outlook
• Negative Sentiment: Recent acquisition (Facet Filtration) raised leverage (management flagged higher net debt/EBITDA near ~1.8–2.0x) and is expected to be accretive only later (FY‑2027), creating near‑term earnings pressure and valuation concerns. Rich Multiple And Weak Results Put Donaldson In The Penalty Box
• Negative Sentiment: Short interest rose meaningfully in February (≈25% increase month‑over‑month), signaling growing bearish positioning that can amplify downside on negative headlines. (Data summary from recent market reports.)

Insider Buying and Selling

In other Donaldson news, CFO Bradley J. Pogalz sold 566 shares of the firm’s stock in a transaction that occurred on Tuesday, December 9th. The shares were 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 trade represents a 56.60% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through this link. Also, Director Ajita G. Rajendra sold 19,800 shares of the company’s stock in a transaction that occurred on Friday, December 5th. The shares were sold at an average price of $92.04, for a total transaction of $1,822,392.00. Following the completion of the transaction, the director owned 43,993 shares of the company’s stock, valued at $4,049,115.72. This trade represents a 31.04% decrease in their position. The SEC filing for this sale provides additional information. 2.20% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Several large investors have recently added to or reduced their stakes in the business. Royal Bank of Canada increased its stake in Donaldson by 38.2% in the 1st quarter. Royal Bank of Canada now owns 102,128 shares of the industrial products company’s stock valued at $6,848,000 after buying an additional 28,207 shares during the last quarter. Integrated Wealth Concepts LLC grew its holdings in shares of Donaldson by 16.5% in the 1st quarter. Integrated Wealth Concepts LLC now owns 3,479 shares of the industrial products company’s stock valued at $233,000 after acquiring an additional 494 shares in the last quarter. Millennium Management LLC increased its position in shares of Donaldson by 428.6% in the first quarter. Millennium Management LLC now owns 223,976 shares of the industrial products company’s stock valued at $15,020,000 after acquiring an additional 181,602 shares during the last quarter. Goldman Sachs Group Inc. raised its holdings in Donaldson by 29.0% during the first quarter. Goldman Sachs Group Inc. now owns 279,525 shares of the industrial products company’s stock worth $18,745,000 after acquiring an additional 62,864 shares in the last quarter. Finally, EverSource Wealth Advisors LLC boosted its position in Donaldson by 84.9% during the second quarter. EverSource Wealth Advisors LLC now owns 2,032 shares of the industrial products company’s stock valued at $141,000 after purchasing an additional 933 shares during the last quarter. Institutional investors and hedge funds own 82.81% of the company’s stock.

Donaldson Company Profile

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.