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Graco
(NYSE:GGG)
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Rating:71Outperform
Price Target:
$82.00
▼(-5.46% Downside)
Action:Reiterated
Date:06/15/26
GGG scores well primarily on strong financial quality (high margins, very low leverage, solid cash generation). The score is held back by weak technicals (below key moving averages with negative MACD) and a valuation that looks more premium than bargain (P/E ~23.9, modest yield). Earnings-call commentary was mixed, with guidance reaffirmed and bookings/backlog improving, but near-term organic and margin pressure persists.
Positive Factors
Balance sheet conservatism
Extremely low leverage gives Graco durable financial flexibility to fund cyclical downturns, opportunistic M&A, and capital spending without stressing liquidity. This downside protection supports capital returns and long-term strategic execution even if revenues soften.
Negative Factors
Organic demand weakness
A sustained organic sales decline across segments signals underlying end-market softness (contractor, industrial, expansion markets). If persistent, this reduces operating leverage, limits pricing power and slows the pace at which backlog and bookings convert into durable revenue gains.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance sheet conservatism
Extremely low leverage gives Graco durable financial flexibility to fund cyclical downturns, opportunistic M&A, and capital spending without stressing liquidity. This downside protection supports capital returns and long-term strategic execution even if revenues soften.
Read all positive factors
Graco Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where Graco is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where Graco is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyGraco (GGG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.49B
Dividend Yield1.32%
Average Volume (3M)1.43M
Price to Earnings (P/E)24.1
Beta (1Y)0.73
Revenue Growth4.61%
EPS Growth7.87%
CountryUS
Employees4,300
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)3.12
Shares Outstanding165,968,170
10 Day Avg. Volume1,363,780
30 Day Avg. Volume1,430,112
Financial Highlights & Ratios
PEG Ratio2.95
Price to Book (P/B)5.23
Price to Sales (P/S)6.20
P/FCF Ratio21.75
Enterprise Value/Market Cap0.95
Enterprise Value/Revenue5.26
Enterprise Value/Gross Profit10.06
Enterprise Value/Ebitda15.90
Forecast
1Y Price Target
$91.00Price Target Upside4.91% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)3.13
Revenue Forecast (FY)$2.36B
Graco Business Overview & Revenue Model
Company Description
Graco Inc., a Minneapolis, Minnesota-based company established in 1926, specializes globally in the engineering, production, and distribution of sophisticated systems and apparatus. These solutions are designed for the precise handling, measuremen...
How the Company Makes Money
Graco primarily makes money by selling engineered equipment, systems, and related accessories used in fluid handling and coating/dispensing applications. Revenue is generated through: (1) Sales of capital equipment and systems—higher-value sprayer...
Graco Earnings Call Summary
Earnings Call Date:Apr 22, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 22, 2026
Earnings Call Sentiment Neutral
The call presented a mix of positive operational indicators (bookings growth, backlog expansion, strong semiconductor bookings, maintained full-year guidance, healthy cash generation and an active M&A pipeline) alongside material near-term headwinds (6% organic revenue decline, EPS down 6%, gross margin compression, tariff-related costs and a slow start with timing-related backlog conversion). Management emphasized confidence in demand momentum, backlog conversion and disciplined capital allocation, but underlying organic weakness—especially in contractor/construction end markets—and margin pressure temper the tone.Positive Updates
Total Sales Growth with Acquisition and Currency Support
Reported first quarter sales of $540 million, up 2% year-over-year; growth composition: acquisitions +5%, currency translation +3%, offset by organic sales -6%.
Negative Updates
Organic Revenue Decline
Organic sales declined 6% company-wide in the quarter; by segment organic declines were Contractor -4%, Industrial -8% and Expansion Markets -5%, indicating continuing pressure in underlying demand.
Read all updates
Q1-2026 Updates
Positive
Negative
Total Sales Growth with Acquisition and Currency Support
Reported first quarter sales of $540 million, up 2% year-over-year; growth composition: acquisitions +5%, currency translation +3%, offset by organic sales -6%.
Read all positive updates
Company Guidance
Management reaffirmed 2026 revenue guidance of low‑single‑digit organic growth (constant currency) and mid‑single‑digit growth including acquisitions, and said current exchange rates (assuming similar volume/mix) should be ~+1% to net sales and ~+2% to net earnings; they expect a full‑year adjusted effective tax rate of ~20–21%, unallocated corporate expenses of $40–$43M, and capital expenditures of $90–$100M (about $50M for facility expansions). On the Q1 results they reported sales of $540M (+2% y/y: acquisitions +5%, FX +3%, organic −6%), reported net earnings $119M (−5%, $0.70/sh) and adjusted EPS $0.66 (−6%), gross margin down 60 bps, tariffs added ~$7M of product cost, cash from operations $120M (down $5M; 107% of adjusted net earnings), and YTD uses including 189k shares repurchased for $16M, dividends $49M, capex $12M and $40M of share issuances. Bookings were up (overall +3% at actual rates; Industrial bookings +5%) driving roughly $26M of backlog growth in Q1 (≈$23M in Industrial) plus another ~$21M backlog build post‑quarter; Q1 operating margin rates were Contractor & Expansion 24%, Industrial 32%, and total operating earnings 26% (vs 27% prior); 2027 will be a 53‑week year (extra week in Q4).Graco Financial Statement Overview
Summary
Income Statement
90
Very Positive
Balance Sheet
94
Very Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.25B | 2.24B | 2.11B | 2.20B | 2.14B | 1.99B |
| Gross Profit | 1.18B | 1.17B | 1.12B | 1.16B | 1.06B | 1.03B |
| EBITDA | 744.16M | 751.53M | 678.86M | 686.59M | 641.62M | 578.00M |
| Net Income | 516.24M | 521.84M | 486.08M | 506.51M | 460.64M | 439.87M |
Balance Sheet | ||||||
| Total Assets | 3.33B | 3.27B | 3.14B | 2.72B | 2.44B | 2.44B |
| Cash, Cash Equivalents and Short-Term Investments | 712.17M | 624.08M | 675.34M | 537.95M | 339.20M | 624.30M |
| Total Debt | 52.89M | 60.96M | 48.65M | 50.06M | 126.59M | 226.11M |
| Total Liabilities | 592.37M | 620.34M | 555.08M | 497.78M | 579.25M | 733.86M |
| Stockholders Equity | 2.74B | 2.65B | 2.58B | 2.22B | 1.86B | 1.71B |
Cash Flow | ||||||
| Free Cash Flow | 631.21M | 637.92M | 514.96M | 466.24M | 176.23M | 323.33M |
| Operating Cash Flow | 678.42M | 683.59M | 621.70M | 651.02M | 377.39M | 456.90M |
| Investing Cash Flow | -174.37M | -172.80M | -342.81M | -185.27M | -226.82M | -153.30M |
| Financing Cash Flow | -336.32M | -576.05M | -139.86M | -268.01M | -434.40M | -57.14M |
Graco Technical Analysis
Negative
86.74
Price Trends
76.62
Negative
82.56
Negative
82.85
Negative
Market Momentum
-0.33
Negative
47.35
Neutral
54.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GGG, the sentiment is Negative. The current price of 86.74 is above the 20-day moving average (MA) of 75.10, above the 50-day MA of 76.62, and above the 200-day MA of 82.85, indicating a neutral trend. The MACD of -0.33 indicates Negative momentum. The RSI at 47.35 is Neutral, neither overbought nor oversold. The STOCH value of 54.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GGG.
Graco Risk Analysis
Graco disclosed 24 risk factors in its most recent earnings report. Graco reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Graco Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $16.57B | 33.06 | 12.61% | 1.56% | 7.54% | 7.09% | |
75 Outperform | $16.18B | 30.86 | 17.12% | 1.64% | 7.37% | 20.50% | |
72 Outperform | $16.70B | 32.77 | 13.03% | 0.79% | 16.63% | -9.75% | |
71 Outperform | $12.49B | 24.12 | 19.65% | 1.32% | 4.61% | 7.87% | |
70 Outperform | $12.57B | 39.21 | 16.30% | 0.49% | 7.18% | 5.22% | |
68 Neutral | $14.87B | 77.98 | 7.18% | ― | -0.51% | -44.42% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
GGG
Graco
75.67
-10.78
-12.47%
GNRC
Generac Holdings
257.81
109.48
73.81%
IEX
IDEX
224.46
48.43
27.52%
ITT
ITT
190.07
32.51
20.63%
NDSN
Nordson
293.66
77.71
35.98%
CR
Crane Company
220.06
29.88
15.71%
Graco Corporate Events
Business Operations and StrategyExecutive/Board Changes
Graco Adds Lincoln Electric CEO Hedlund to Board
Positive
Jun 15, 2026
On June 12, 2026, Graco Inc. announced that it has appointed Steven B. Hedlund, President, CEO and Chairman of Lincoln Electric Holdings, to its Board of Directors, effective September 10, 2026. Hedlund will join the class of directors whose terms...
Business Operations and StrategyM&A Transactions
Graco to Acquire Valco Melton, Expanding Industrial Portfolio
Positive
May 21, 2026
On May 21, 2026, Graco Inc. announced a definitive agreement to acquire Valco Cincinnati, doing business as Valco Melton, a global provider of adhesive application and quality assurance systems, for $447 million in cash, including approximately $4...
Business Operations and Strategy
Graco Highlights Long-Term Growth Strategy at Investor Event
Positive
May 5, 2026
On May 5, 2026, Graco Inc. published an investor presentation to support its investor relations efforts, coinciding with an investor access event at its Dayton, Minnesota facilities that showcased executive briefings, plant tours and product demon...
Executive/Board ChangesShareholder Meetings
Graco Shareholders Approve Directors, Auditor and Executive Pay
Positive
Apr 27, 2026
At its April 24, 2026 Annual Meeting of Shareholders, Graco Inc. reported the election of four directors, with Martha A. Morfitt, Mark W. Sheahan, Andrea H. Simon, and Kevin J. Wheeler each winning three-year terms, reflecting strong but not unani...
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.