Jefferies Turns Bullish on Donaldson (DCI) as Cyclical Demand Signals Improve

Donaldson Company, Inc. (NYSE:DCI) is included among the 14 Best Mid Cap Dividend Aristocrat Stocks to Buy Now.

On January 9, Jefferies upgraded Donaldson Company, Inc. (NYSE:DCI) to Buy from Hold and lifted its price target to $120 from $92. The analyst said the stock has been moving higher as investors start to see early signs of improvement in the mining and non-residential construction markets. Jefferies believes clearer confirmation of that upswing could support the shares into mid-2026. The firm also noted that Donaldson stands to benefit from an easier credit backdrop and fiscal stimulus, which could boost demand in gas turbines, industrial markets, and trucks.

Donaldson last reported fiscal Q1 2026 earnings on December 4. CEO Tod Carpenter pointed to a strong start to the year, with record sales of $935 million, a record operating margin of 15.5%, and EPS of $0.94, up 13% from the prior year. He said momentum was broad-based, with growth coming from areas like Mobile Aftermarket, Power Generation, Food and Beverage, and Disk Drive.

Carpenter also highlighted the company’s expanding partnerships, including work with NAPA, and said Donaldson Company continues to take share in the independent channel. That part of the business delivered nearly double-digit sales growth. In Off-Road, he said strength tied to construction activity helped offset weaker conditions in agriculture. He also pointed to strong demand in Power Generation, with order books staying 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 16.2%–16.8%, with the midpoint at 16.5%, and suggested incremental margins could run above 40%. The company also nudged up its fiscal 2026 EPS guidance by $0.03, now forecasting $3.95 to $4.11, with a midpoint of $4.03.

Donaldson Company, Inc. (NYSE:DCI) is a global leader in filtration products and solutions, serving customers across a wide range of industries and specialized markets.

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