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    PH · NYQ · Industrials

    Parker-Hannifin Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 480.82

    Market price

    USD 928.29

    Implied upside

    -48.2%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-06-30

    Current EV/EBITDA of 22.5x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 480.82-48.2%
    Exit multiple
    USD 818.23-11.9%
    Market price
    USD 928.29

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn6bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 24.8bnUSD 26.6bnUSD 28.5bnUSD 30.3bnUSD 32.0bnUSD 33.6bnUSD 35.0bnUSD 36.3bnUSD 37.5bnUSD 38.4bn+5.0%
    EBITUSD 4.8bnUSD 5.1bnUSD 5.5bnUSD 5.8bnUSD 6.2bnUSD 6.5bnUSD 6.8bnUSD 7.0bnUSD 7.2bnUSD 7.4bn+5.0%
    NOPATUSD 3.8bnUSD 4.1bnUSD 4.4bnUSD 4.6bnUSD 4.9bnUSD 5.2bnUSD 5.4bnUSD 5.6bnUSD 5.8bnUSD 5.9bn+5.0%
    Add depreciation & amortisationUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.7bnUSD 1.7bn+5.0%
    Less capital expenditureUSD -516.3mUSD -638.6mUSD -771.9mUSD -915.2mUSD -1.1bnUSD -1.2bnUSD -1.4bnUSD -1.6bnUSD -1.7bnUSD -1.9bn+15.5%
    Capex, % of revenue2.1%2.4%2.7%3.0%3.3%3.7%4.0%4.3%4.6%4.9%-
    Less increase in working capitalUSD -601.9mUSD -340.3mUSD -335.3mUSD -325.8mUSD -311.6mUSD -292.5mUSD -268.8mUSD -240.4mUSD -207.9mUSD -171.5m-13.0%
    Free cashflow to firmUSD 3.8bnUSD 4.3bnUSD 4.5bnUSD 4.8bnUSD 5.0bnUSD 5.1bnUSD 5.3bnUSD 5.4bnUSD 5.5bnUSD 5.6bn+4.3%
    Discount factor0.95710.87660.80300.73550.67370.61710.56520.51770.47420.4344-
    Present valueUSD 3.6bnUSD 3.8bnUSD 3.6bnUSD 3.5bnUSD 3.3bnUSD 3.2bnUSD 3.0bnUSD 2.8bnUSD 2.6bnUSD 2.4bn-
    Present Value Of The ForecastUSD 31.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.097Reported 1.145, pulled toward 1.0 (Blume)
    Cost of equity9.53%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 11.6x interest cover. Book interest / average debt was lower, at 4.5%.
    Market capitalisationUSD 117.1bn93.2% of capital
    Total debtUSD 8.5bn6.8% of capital, book value as a proxy
    Tax rate20.4%Effective, capped at statutory
    WACC9.17%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 480.82

    54% of EV

    Forecast FCFF, final year
    USD 5.6bn
    Capex at depreciation, working capital in reinvestment
    USD 6.7bn
    Less reinvestment at g/ROIC (18.2% of NOPAT)
    USD -1.2bn
    Capitalised
    USD 5.5bn
    ROIC (reported)
    13.7%
    Terminal value, undiscounted
    USD 84.7bn
    Terminal value, discounted
    USD 36.8bn
    Enterprise value
    USD 68.7bn
    Less net debt
    USD 8.0bn
    Equity value
    USD 60.6bn

    Exit at 20.0x EBITDA

    Value per shareUSD 818.23

    71% of EV

    Terminal value, undiscounted
    USD 182.6bn
    Terminal value, discounted
    USD 79.3bn
    Enterprise value
    USD 111.2bn
    Less net debt
    USD 8.0bn
    Equity value
    USD 103.2bn

    Spread between methods: 52%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.17%664.13683.72708.46740.22781.85
    8.17%553.90563.07574.61589.20607.84
    9.17%472.52476.10480.82486.97494.91
    10.17%410.00410.45411.45413.12415.62
    11.17%360.50359.14358.04357.25356.83

    Outlined: this model. Green text: above today's price of 928.29. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year4.1%6.0%13.9%
    EBIT margin21.6%19.3%37.1%
    Discount rate-9.2%6.1%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.