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Applied Industrial Technologies
(NYSE:AIT)
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Rating:78Outperform
Price Target:
$365.00
â–²(8.75% Upside)
Action:Reiterated
Date:08/17/26
The score is driven primarily by strong financial performance—expanding margins, high ROE, and sharply improved leverage—supported by a favorable technical uptrend. The main constraint is valuation (high P/E with a low dividend yield), while the latest earnings call was broadly positive but flagged LIFO and working-capital headwinds that could temper near-term cash flow.
Positive Factors
Margin expansion
Sustained margin improvement indicates stronger operating efficiency and/or a better business mix. Higher profitability gives Applied greater capacity to reinvest in engineered solutions, support customer service capabilities, and generate earnings growth even as industrial demand normalizes.
Negative Factors
Persistent LIFO cost headwind
Higher expected LIFO expense creates a recurring cost headwind that can limit near-term margin conversion even when sales grow. Unless offset by pricing, mix, or productivity, this expense may reduce the earnings benefit of operational improvements over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin expansion
Sustained margin improvement indicates stronger operating efficiency and/or a better business mix. Higher profitability gives Applied greater capacity to reinvest in engineered solutions, support customer service capabilities, and generate earnings growth even as industrial demand normalizes.
Read all positive factors
Applied Industrial Technologies (AIT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.62B
Dividend Yield0.58%
Average Volume (3M)273.41K
Price to Earnings (P/E)31.0
Beta (1Y)1.08
Revenue Growth8.84%
EPS Growth8.10%
CountryUS
Employees6,900
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)11.09
Shares Outstanding36,733,894
10 Day Avg. Volume315,278
30 Day Avg. Volume273,409
Financial Highlights & Ratios
PEG Ratio3.77
Price to Book (P/B)6.79
Price to Sales (P/S)2.54
P/FCF Ratio27.45
Enterprise Value/Market Cap1.03
Enterprise Value/Revenue2.62
Enterprise Value/Gross Profit8.63
Enterprise Value/Ebitda23.55
Forecast
1Y Price Target
$400.00Price Target Upside19.18% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)12.03
Revenue Forecast (FY)$5.25B
Applied Industrial Technologies Business Overview & Revenue Model
Company Description
Applied Industrial Technologies, Inc. (AIT) is a prominent distributor specializing in advanced solutions for industrial motion, power, control, and automation. Its operational footprint extends across North America, Australia, New Zealand, and Si...
How the Company Makes Money
AIT primarily makes money by selling industrial products and services to MRO and OEM customers. Its key revenue streams include: (1) product distribution revenue from sourcing branded and private-label industrial components (notably bearings, powe...
Applied Industrial Technologies Earnings Call Summary
Earnings Call Date:Aug 13, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call conveyed predominantly positive operational and financial momentum: record quarterly sales, strong organic growth (notably in automation and engineered solutions), meaningful EBITDA and EPS expansion, robust free cash flow generation, active capital deployment, and raised multi-year targets. Key headwinds were LIFO-related inventory expense depressing margins, softer flow control/chemical end markets, and caution around macro/trade-policy uncertainty and tougher back-half comparisons. Management provided prudent FY27 guidance that balances confidence in early-year demand with measured assumptions for later periods.Positive Updates
Record Q4 Sales and Earnings
Consolidated Q4 sales increased 10.4% year-over-year (9.7% organic). Reported EPS of $3.17, up 13.2% vs prior year. Management described the quarter as a solid finish with results exceeding expectations.
Negative Updates
LIFO Inventory Expense Headwind
LIFO expense increased to $6.4 million in the quarter (vs $2.9M prior year and $5.6M last quarter), producing a ~26 basis point unfavorable impact on gross margin and ~26 basis point negative impact on EBITDA margin. Guidance assumes FY27 LIFO of $24M–$28M (vs $21.5M FY26), representing potential continued headwinds.
Read all updates
Q4-2026 Updates
Positive
Negative
Record Q4 Sales and Earnings
Consolidated Q4 sales increased 10.4% year-over-year (9.7% organic). Reported EPS of $3.17, up 13.2% vs prior year. Management described the quarter as a solid finish with results exceeding expectations.
Read all positive updates
Company Guidance
For fiscal 2027 Applied guided EPS of $11.65–$12.15 on sales growth of 4.0%–6.5% and EBITDA margins of 12.5%–12.8%, assuming 150–200 basis points of year‑over‑year sales contribution from pricing; guidance excludes any contribution from future acquisitions or share buybacks. They expect FY27 LIFO expense of $24M–$28M (versus $21.5M in FY26), CapEx of $35M–$40M, and free cash flow to remain strong but potentially down year‑over‑year due to greater working capital needs. Near‑term, Q1 organic sales are projected +6%–8% with Q1 EBITDA margins of 12.3%–12.4%, and the midpoint of full‑year guidance implies incremental EBITDA margins in the company’s targeted mid‑to‑high‑teens.Applied Industrial Technologies Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
83
Very Positive
Cash Flow
78
Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.97B | 4.56B | 4.48B | 4.41B | 3.81B |
| Gross Profit | 1.51B | 1.38B | 1.34B | 1.29B | 1.11B |
| EBITDA | 552.21M | 579.66M | 571.03M | 527.67M | 410.13M |
| Net Income | 414.52M | 392.99M | 385.76M | 346.74M | 257.41M |
Balance Sheet | |||||
| Total Assets | 3.01B | 3.18B | 2.95B | 2.74B | 2.45B |
| Cash, Cash Equivalents and Short-Term Investments | 127.13M | 388.42M | 460.62M | 344.04M | 184.47M |
| Total Debt | 483.44M | 572.30M | 734.94M | 622.10M | 800.25M |
| Total Liabilities | 1.15B | 1.33B | 1.26B | 1.28B | 1.30B |
| Stockholders Equity | 1.86B | 1.84B | 1.69B | 1.46B | 1.15B |
Cash Flow | |||||
| Free Cash Flow | 460.52M | 465.20M | 346.53M | 317.49M | 169.45M |
| Operating Cash Flow | 484.08M | 492.38M | 371.39M | 343.97M | 187.57M |
| Investing Cash Flow | -33.90M | -318.75M | -95.41M | -60.83M | -35.66M |
| Financing Cash Flow | -711.54M | -245.61M | -156.47M | -126.89M | -223.03M |
Applied Industrial Technologies Technical Analysis
Positive
335.64
Price Trends
337.48
Positive
329.58
Positive
302.69
Positive
Market Momentum
1.62
Negative
61.82
Neutral
82.63
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AIT, the sentiment is Positive. The current price of 335.64 is above the 20-day moving average (MA) of 327.31, below the 50-day MA of 337.48, and above the 200-day MA of 302.69, indicating a bullish trend. The MACD of 1.62 indicates Negative momentum. The RSI at 61.82 is Neutral, neither overbought nor oversold. The STOCH value of 82.63 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AIT.
Applied Industrial Technologies Risk Analysis
Applied Industrial Technologies disclosed 20 risk factors in its most recent earnings report. Applied Industrial Technologies reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Applied Industrial Technologies Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $12.62B | 30.97 | 22.17% | 0.58% | 8.84% | 8.10% | |
78 Outperform | $60.30B | 32.63 | 48.70% | 0.74% | 7.80% | -0.65% | |
75 Outperform | $58.24B | 43.01 | 34.03% | 1.89% | 12.54% | 13.58% | |
75 Outperform | $1.66B | 19.47 | 26.97% | 2.52% | 8.43% | 29.47% | |
67 Neutral | $18.60B | 26.06 | 14.06% | 0.51% | 12.51% | 13.23% | |
65 Neutral | $7.27B | 31.43 | 16.55% | 2.67% | 4.41% | 16.62% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
AIT
Applied Industrial Technologies
343.45
86.14
33.48%
FAST
Fastenal Company
50.75
3.99
8.52%
MSM
MSC Industrial
130.12
41.37
46.62%
GIC
Global Industrial Company
43.61
9.49
27.80%
GWW
WW Grainger
1,280.30
329.26
34.62%
WCC
Wesco International
381.73
163.65
75.04%
Applied Industrial Technologies Corporate Events
Executive/Board Changes
Applied Industrial Technologies Announces Board Transition and Refresh
Positive
Aug 14, 2026
On August 11, 2026, Applied Industrial Technologies elected Pamela J. Tomczik, Senior Vice President, Treasurer and Business Development at Target Corporation and a veteran of corporate development roles at Target and Thomson Reuters, to its Board...
Executive/Board Changes
Applied Industrial Technologies Announces Upcoming Board Director Change
Neutral
Jun 25, 2026
Applied Industrial Technologies, Inc. reported that on June 22, 2026, its Corporate Governance Sustainability Committee accepted the resignation of board director Mary Dean Hall, effective at the next annual shareholders’ meeting. The depar...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.