Jefferies upgraded Donaldson Company, Inc. (NYSE:DCI) to Buy from Hold on January 9, raising its price target to $120 from $92. The analyst noted the stock has been rising as investors see early signs of improvement in mining and non-residential construction markets. Jefferies stated clearer confirmation of this upswing could support the shares into mid-2026. The firm also mentioned Donaldson could benefit from an easier credit backdrop and fiscal stimulus, potentially boosting demand in gas turbines, industrial markets, and trucks.
Donaldson reported fiscal first quarter 2026 earnings on December 4. CEO Tod Carpenter described a strong start to the year, with record sales of $935 million, a record operating margin of 15.5%, and earnings per share of $0.94, up 13% from the prior year. He said momentum was broad-based, with growth coming from areas including Mobile Aftermarket, Power Generation, Food and Beverage, and Disk Drive.
Carpenter highlighted the company's expanding partnerships, such as work with NAPA, and said Donaldson continues to gain share in the independent channel. That part of the business delivered nearly double-digit sales growth. In Off-Road, he noted strength tied to construction activity helped offset weaker conditions in agriculture. He also pointed to strong demand in Power Generation, with order books remaining full as data centers and AI-related infrastructure drive spending.
Following the quarter, Donaldson raised its full-year operating margin outlook by 10 basis points to a range of 16.2% to 16.8%, with a midpoint of 16.5%, and suggested incremental margins could run above 40%. The company also increased its fiscal 2026 earnings per share guidance by $0.03, now forecasting $3.95 to $4.11, with a midpoint of $4.03.
Donaldson Company, Inc. is included among the 14 Best Mid Cap Dividend Aristocrat Stocks to Buy Now.