We are upgrading the recommendation on Parker Hannifin (PH) to Outperform with a $67 target price. We are encouraged that order trends have improved sequentially for the prior two consecutive quarters, indicating that the worst is behind the company.
Reflecting the benefits of restructuring actions and improving market conditions, it has increased its earnings guidance for fiscal 2010 to the range of $2.40 to $2.80 per share, representing a 44% increase from the midpoint of the previous estimate.
Cash on the balance sheet stands at $234 million with no commercial paper outstanding. Inventory has been reduced by $336 million since last year and days sales outstanding have improved over the prior year.Zacks Investment Research
