Donaldson (NYSE:DCI) Shares Gap Down After Earnings Miss

Donaldson Company, Inc. (NYSE:DCI)’s share price gapped down before the market opened on Thursday following a dissappointing earnings announcement. The stock had previously closed at $104.42, but opened at $95.06. Donaldson shares last traded at $87.2710, with a volume of 266,421 shares changing hands.

The industrial products company reported $0.83 earnings per share for the quarter, missing the consensus estimate of $0.90 by ($0.07). Donaldson had a return on equity of 30.24% and a net margin of 10.25%.The firm had revenue of $896.30 million for the quarter, compared to analyst estimates of $898.64 million. During the same quarter last year, the company earned $0.83 earnings per share. The company’s quarterly revenue was up 3.0% compared to the same quarter last year. Donaldson has set its FY 2026 guidance at 3.930-4.010 EPS.

Donaldson Dividend Announcement

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

Key Donaldson News

Here are the key news stories impacting Donaldson this week:

• Positive Sentiment: Profitability still solid: Donaldson reported a net margin of 10.25% and return on equity of 30.24%, indicators investors use to judge longer‑term profitability and capital efficiency. View Press Release
• Neutral Sentiment: Q2 GAAP results: Donaldson reported GAAP net earnings of $92.5M and GAAP EPS of $0.78; results included a $6.7M pre‑tax, non‑recurring charge—this one‑time item helps explain the quarter’s shortfall versus expectations. Donaldson Reports Second Quarter Fiscal Year 2026 Sales and Earnings
• Neutral Sentiment: Press coverage and roundups provide context on aftermarket weakness and mixed results across peers—useful for sector comparisons but not new company guidance. Donaldson: Fiscal Q2 Earnings Snapshot Earnings Roundup
• Negative Sentiment: Quarterly EPS missed Street estimates: reported EPS ($0.83 per company summary / $0.78 GAAP) vs. consensus ~$0.90, and revenue $896.3M vs. ~$898.6M — small misses that matter when combined with below‑consensus guidance. View Press Release
• Negative Sentiment: FY2026 guidance trims expectations: Donaldson set EPS guidance of $3.930–$4.010 vs. the Street at ~$4.04 (below consensus); revenue guide $3.7B–$3.9B overlaps consensus but EPS guidance is the headline negative for investors.
• Negative Sentiment: Short interest rose sharply in February (up ~25% to ~1.88M shares, ~1.7% of float), increasing potential selling pressure and signaling some investors are betting on further downside.
• Neutral Sentiment: Analyst/preview pieces emphasized aftermarket weakness as a risk for near‑term mixes and margins; monitor management commentary on aftermarket trends during the call/slide deck. Aftermarket weakness tests outlook
• Neutral Sentiment: Product/market developments (e.g., ArmorSeal launch) are being watched for growth potential but don’t offset the near‑term earnings/guidance pressure. ArmorSeal Launch Tests Donaldson’s High Valuation

Wall Street Analysts Forecast Growth

A number of equities research analysts have weighed in on DCI shares. UBS Group set a $96.00 target price on Donaldson in a report on Tuesday. Robert W. Baird set a $110.00 target price on shares of Donaldson in a research report on Monday, February 2nd. Weiss Ratings reissued a “buy (b)” rating on shares of Donaldson in a research note on Friday, January 9th. Stifel Nicolaus lifted their price target on shares of Donaldson from $90.00 to $96.00 and gave the company a “hold” rating in a research note on Friday, December 5th. Finally, Morgan Stanley raised shares of Donaldson from an “underweight” rating to an “equal weight” rating and increased their price objective for the stock from $72.00 to $84.00 in a research report on Monday, November 24th. Three investment analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company’s stock. Based on data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $101.80.

Insider Activity

In related news, CFO Bradley J. Pogalz sold 566 shares of the stock in a transaction on Tuesday, December 9th. The stock was sold at an average price of $91.57, for a total value of $51,828.62. Following the completion of the sale, the chief financial officer directly owned 434 shares of the company’s stock, valued at approximately $39,741.38. This represents a 56.60% decrease in their position. The transaction was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, Director Ajita G. Rajendra sold 19,800 shares of the stock in a transaction dated 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 sale, the director owned 43,993 shares of the company’s stock, valued at approximately $4,049,115.72. This represents a 31.04% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders own 2.20% of the company’s stock.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently bought and sold shares of DCI. MidFirst Bank bought a new position in Donaldson in the 4th quarter valued at $176,000. Kera Capital Partners Inc. grew its position in Donaldson by 34.1% during the fourth quarter. Kera Capital Partners Inc. now owns 6,897 shares of the industrial products company’s stock valued at $611,000 after buying an additional 1,754 shares during the period. Virtu Financial LLC purchased a new stake in Donaldson during the fourth quarter worth about $828,000. Invesco Ltd. raised its position in Donaldson by 1.6% in the fourth quarter. Invesco Ltd. now owns 1,355,944 shares of the industrial products company’s stock worth $120,218,000 after acquiring an additional 21,268 shares during the period. Finally, Birchwood Financial Partners Inc. purchased a new position in Donaldson in the fourth quarter valued at about $3,518,000. Hedge funds and other institutional investors own 82.81% of the company’s stock.

Donaldson Stock Down 14.9%

The stock’s 50-day moving average price is $99.99 and its two-hundred day moving average price is $89.08. The company has a current ratio of 2.15, a quick ratio of 1.39 and a debt-to-equity ratio of 0.44. The stock has a market capitalization of $10.25 billion, a P/E ratio of 27.53, a P/E/G ratio of 2.64 and a beta of 1.00.

About Donaldson

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.