Donaldson shares have dropped 6.7% over the past six months to $85.86, underperforming the S&P 500’s 10.9% gain. The company’s constant currency revenue growth averaged just 3% annually over the last two years, signaling soft underlying demand. Sell-side analysts project revenue will rise only 6.9% over the next 12 months, below the sector average. Donaldson’s return on invested capital has declined by an average of 1.6 percentage points each year, suggesting fewer profitable growth opportunities. The stock trades at 12.9 times forward EV-to-EBITDA, but its shaky fundamentals present too much downside risk.
Donaldson Company IncArticle reports weak demand and declining returns for Donaldson.
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