Donaldson (NYSE:DCI) Shares Gap Down Following Weak Earnings

Donaldson Company, Inc. (NYSE:DCI) shares gapped down before the market opened on Thursday following a weaker than expected 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 trading hands.

The industrial products company reported $0.83 EPS 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 during the quarter, compared to analysts’ expectations of $898.64 million. During the same period in the previous year, the firm earned $0.83 earnings per share. The firm’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 Announces Dividend

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

Donaldson News Summary

Here are the key news stories impacting Donaldson this week:

• Positive Sentiment: Revenue and sales growth: Donaldson reported year-over-year sales growth (roughly +3%) and management described strong total sales for the quarter, showing demand resiliency in some end markets. Earnings Highlights
• Neutral Sentiment: Company filings and call materials published: full press release, slide deck and call transcript are available for investors to review management commentary and segment detail. BusinessWire Release
• Negative Sentiment: Earnings and revenue misses: GAAP EPS and adjusted EPS came in below consensus ($0.83 vs. ~$0.90) and revenue slightly missed estimates, which triggered the immediate sell-off. Zacks: Miss
• Negative Sentiment: Lowered/trimmed FY26 guidance vs. consensus: management set FY26 EPS at $3.93–$4.01 (below street) and gave revenue guidance that sits below analysts’ expectations—investors interpreted this as weaker near-term profit visibility. Seeking Alpha: Lowered Outlook
• Negative Sentiment: Margin pressure and segment weakness: management flagged ongoing margin compression—particularly in Industrial Solutions and aftermarket channels—which compressed EPS despite revenue growth. Seeking Alpha: Margin Pressure
• Negative Sentiment: Acquisition and leverage concerns: the recent Facet Filtration acquisition (~$820M) raises net leverage to ~1.8–2.0x and is seen as priced at a premium; management expects accretion in FY2027 but the near-term debt and integration risk weighed on sentiment. Seeking Alpha: Acquisition/Leverage
• Negative Sentiment: Rising short interest: short positions increased materially in February, signalling greater downside conviction and amplifying today’s selling pressure (higher volume on the decline).

Analyst Ratings Changes

A number of research analysts recently issued reports on DCI shares. UBS Group set a $96.00 price target on Donaldson in a report on Tuesday. Weiss Ratings reiterated a “buy (b)” rating on shares of Donaldson in a research report on Friday, January 9th. Morgan Stanley upgraded Donaldson from an “underweight” rating to an “equal weight” rating and upped their target price for the company from $72.00 to $84.00 in a report on Monday, November 24th. Robert W. Baird set a $110.00 price target on Donaldson in a research note on Monday, February 2nd. Finally, Jefferies Financial Group boosted their price objective on shares of Donaldson to $123.00 and gave the company a “buy” rating in a research report on Monday, February 2nd. Three research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company’s stock. Based on data from MarketBeat, Donaldson has a consensus rating of “Moderate Buy” and an average target price of $101.80.

Insider Buying and Selling at Donaldson

In other news, Director Ajita G. Rajendra sold 19,800 shares of Donaldson 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 directly owned 43,993 shares of the company’s stock, valued at $4,049,115.72. The trade was a 31.04% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, CFO Bradley J. Pogalz sold 566 shares of the firm’s stock in a transaction dated Tuesday, December 9th. The shares were sold at an average price of $91.57, for a total value of $51,828.62. Following the sale, the chief financial officer owned 434 shares in the company, valued at $39,741.38. This trade represents a 56.60% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders own 2.20% of the company’s stock.

Institutional Trading of Donaldson

Several large investors have recently added to or reduced their stakes in DCI. Verdence Capital Advisors LLC increased its position in shares of Donaldson by 1.2% during the fourth quarter. Verdence Capital Advisors LLC now owns 8,603 shares of the industrial products company’s stock valued at $763,000 after acquiring an additional 101 shares during the last quarter. TIAA Trust National Association boosted its position in shares of Donaldson by 2.0% during the 4th quarter. TIAA Trust National Association now owns 5,589 shares of the industrial products company’s stock worth $496,000 after purchasing an additional 108 shares during the period. Perigon Wealth Management LLC increased its holdings in Donaldson by 3.6% in the 4th quarter. Perigon Wealth Management LLC now owns 3,440 shares of the industrial products company’s stock valued at $305,000 after purchasing an additional 118 shares during the last quarter. Signaturefd LLC raised its position in Donaldson by 9.6% in the fourth quarter. Signaturefd LLC now owns 1,403 shares of the industrial products company’s stock valued at $124,000 after purchasing an additional 123 shares during the period. Finally, Quadrant Capital Group LLC raised its position in Donaldson by 2.4% in the fourth quarter. Quadrant Capital Group LLC now owns 5,645 shares of the industrial products company’s stock valued at $500,000 after purchasing an additional 132 shares during the period. 82.81% of the stock is currently owned by hedge funds and other institutional investors.

Donaldson Stock Down 11.7%

The business has a 50 day simple moving average of $100.00 and a 200 day simple moving average of $89.10. The company has a market capitalization of $10.64 billion, a price-to-earnings ratio of 28.73, a PEG ratio of 2.58 and a beta of 1.00. The company has a debt-to-equity ratio of 0.44, a current ratio of 2.15 and a quick ratio of 1.39.

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.