Parker-Hannifin Corp.

Record FY26 performance (strong “good”): Parker delivered *record* results across key metrics—FY26 sales $21.5B (first time over $20B), organic growth 6.6%, and adjusted segment operating margin 27.3% (+120 bps YoY). Adjusted EPS $32.31 (+18% YoY). Cash flow from operations $4.4B (first time >$4B) and free cash flow $3.9B (record). Q4 was also record: sales +10% YoY, organic +8%, adjusted segment operating margin 28.0% (+110 bps YoY, first time >28%), adjusted EPS $9.27 (+21% YoY), and incremental margin around 40%.

Capital deployment + shareholder returns (good and tangible): FY26 included >$15B of announced/deployed capital (>$15B announced and deployed). Shareholder actions were meaningful: ~$2B returned (~$1B buybacks + ~$1B dividends). CapEx was $500M for safety/productivity. Despite the investment, Parker reduced net debt by ~$1B in the quarter; net debt / adj. EBITDA improved to ~1.4x (down from 1.7x last year). This supports the “great generators and deployers of cash” message.

Growth strategy via M&A (opportunity, but integration/risk): Parker highlighted major acquisitions consistent with its interconnected-tech strategy: Curtis Instruments closed (completed last September), pending Filtration Group (announced Nov), and pending CIRCOR commercial aerospace/defense business (announced May). Management said there are no major hurdles anticipated; both pending deals are expected to close in the second half of calendar 2026 / first half of FY27, subject to regulatory approvals. Opportunity: expands filtration aftermarket and flight-critical capabilities. Risk: integration execution, regulatory timing, and debt/financing impact around closing.