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Graco
(NYSE:GGG)
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Rating:76Outperform
Price Target:
$78.00
▼(-2.01% Downside)
Action:Reiterated
Date:10/23/26
Overall score reflects strong financial quality (high margins, conservative balance sheet, and solid cash conversion) as the primary support. This is tempered by weak current technicals (price below major moving averages and oversold RSI), and a valuation that appears premium (P/E ~26) with a modest dividend yield. Earnings call tone was positive with improving orders/backlog and strategic initiatives, but management’s cautious Q4 outlook and Industrial project timing/margin pressure keep the score from being higher.
Positive Factors
Strong profitability and cost control
Graco’s high gross, EBIT, and net margins indicate differentiated products, pricing power, and effective cost control. This profitability provides resilience across industrial cycles and supports continued investment, acquisitions, dividends, and repurchases without requiring aggressive financial leverage.
Negative Factors
Uneven revenue growth and cyclical demand
Revenue growth has not been consistently strong, indicating sensitivity to manufacturing, construction, and process-industry spending. Uneven demand can make capacity planning and earnings progression less predictable, limiting the pace at which Graco’s otherwise strong margins translate into sustained growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong profitability and cost control
Graco’s high gross, EBIT, and net margins indicate differentiated products, pricing power, and effective cost control. This profitability provides resilience across industrial cycles and supports continued investment, acquisitions, dividends, and repurchases without requiring aggressive financial leverage.
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
$10.74B
Dividend Yield1.76%
Average Volume (3M)1.77M
Price to Earnings (P/E)21.3
Beta (1Y)0.73
Revenue Growth5.39%
EPS Growth5.94%
CountryUS
Employees4,400
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)3.15
Shares Outstanding160,375,140
10 Day Avg. Volume2,195,253
30 Day Avg. Volume1,767,971
Financial Highlights & Ratios
PEG Ratio2.94
Price to Book (P/B)5.23
Price to Sales (P/S)6.20
P/FCF Ratio21.75
Enterprise Value/Market Cap1.18
Enterprise Value/Revenue5.50
Enterprise Value/Gross Profit10.59
Enterprise Value/Ebitda17.13
Forecast
1Y Price Target
$81.00Price Target Upside1.76% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)3.3
Revenue Forecast (FY)$2.37B
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 makes money primarily by selling engineered fluid-handling equipment, systems, and related components across its three operating segments, generating revenue when customers purchase new equipment for production, maintenance, or jobsite use. ...
Graco Earnings Call Summary
Earnings Call Date:Oct 21, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Feb 01, 2027
Earnings Call Sentiment Positive
The call was broadly positive, supported by record sales, broad-based segment growth, improving orders and backlog, strong cash generation, strategic acquisition and technology opportunities, and continued capital allocation flexibility. The main challenges were lower operating margin, delayed Industrial capital projects, a cautious and somewhat softer fourth-quarter outlook, modest weakness in the Home Center channel, and expected increases in interest expense.Positive Updates
Record Quarterly Sales and Broad-Based Growth
Third-quarter sales reached a record $586 million, up 8% year over year, including 4% organic growth. All three segments and all reportable regions contributed to growth.
Negative Updates
Third-Quarter Revenue Was Slightly Below Guidance Excluding Valco Melton
On a comparable basis excluding Valco Melton, third-quarter revenue finished slightly below the $580 million to $600 million guidance range, primarily within Industrial, due to the timing of larger capital projects, longer decision cycles and projects being delayed or pushed out.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Quarterly Sales and Broad-Based Growth
Third-quarter sales reached a record $586 million, up 8% year over year, including 4% organic growth. All three segments and all reportable regions contributed to growth.
Read all positive updates
Company Guidance
Graco expects fourth quarter revenue of $610 million to $640 million based on current order trends and backlog, with the outlook assuming continuation of order trends and not assuming an acceleration in demand during the fourth quarter; price cost is expected to be flat for Q4 and for the rest of the year, given there are only 13 weeks left, Industrial volume is expected to be “flattish and up maybe a little bit” for the rest of the year, and Valco Melton’s EBITDA margin is targeted to expand “from the high teens to the mid-20% range within 3 years of closing”; the first data center installations under the ABB agreement are targeted by the end of 2029.Graco Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
92
Very Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.31B | 2.24B | 2.11B | 2.20B | 2.14B | 1.99B |
| Gross Profit | 1.20B | 1.17B | 1.12B | 1.16B | 1.06B | 1.03B |
| EBITDA | 742.39M | 751.53M | 678.86M | 686.59M | 641.62M | 578.00M |
| Net Income | 517.48M | 521.84M | 486.08M | 506.51M | 460.64M | 439.87M |
Balance Sheet | ||||||
| Total Assets | 3.26B | 3.27B | 3.14B | 2.72B | 2.44B | 2.44B |
| Cash, Cash Equivalents and Short-Term Investments | 139.82M | 624.08M | 675.34M | 537.95M | 339.20M | 624.30M |
| Total Debt | 164.67M | 60.96M | 48.65M | 50.06M | 126.59M | 226.11M |
| Total Liabilities | 793.18M | 620.34M | 555.08M | 497.78M | 579.25M | 733.86M |
| Stockholders Equity | 2.47B | 2.65B | 2.58B | 2.22B | 1.86B | 1.71B |
Cash Flow | ||||||
| Free Cash Flow | 587.87M | 637.92M | 514.96M | 466.24M | 176.23M | 323.33M |
| Operating Cash Flow | 647.54M | 683.59M | 621.70M | 651.02M | 377.39M | 456.90M |
| Investing Cash Flow | -562.54M | -172.80M | -342.81M | -185.27M | -226.82M | -153.30M |
| Financing Cash Flow | -888.14M | -576.05M | -139.86M | -268.01M | -434.40M | -57.14M |
Graco Technical Analysis
Negative
79.60
Price Trends
78.03
Negative
77.22
Negative
80.86
Negative
Market Momentum
-0.87
Positive
24.28
Positive
30.12
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 79.6 is above the 20-day moving average (MA) of 77.96, above the 50-day MA of 78.03, and below the 200-day MA of 80.86, indicating a bearish trend. The MACD of -0.87 indicates Positive momentum. The RSI at 24.28 is Positive, neither overbought nor oversold. The STOCH value of 30.12 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $10.74B | 21.27 | 19.92% | 1.76% | 5.39% | 5.94% | |
76 Outperform | $28.51B | 29.99 | 9.46% | 0.11% | 7.85% | 88.74% | |
74 Outperform | $17.76B | 32.11 | 17.59% | 1.07% | 7.02% | 24.24% | |
72 Outperform | $8.67B | 23.68 | 16.63% | 1.28% | -0.26% | 29.38% | |
71 Outperform | $26.50B | 23.08 | 15.43% | 1.05% | 8.24% | -47.25% | |
70 Outperform | $16.89B | 32.86 | 12.91% | 1.27% | 7.32% | 12.36% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
GGG
Graco
66.07
-14.72
-18.22%
DOV
Dover
202.51
26.35
14.96%
FLS
Flowserve
69.54
17.34
33.22%
IEX
IDEX
231.06
65.73
39.76%
NDSN
Nordson
321.98
86.56
36.77%
IR
Ingersoll Rand
74.52
-5.64
-7.04%
Graco Corporate Events
Executive/Board Changes
Graco Appoints Richard Lewis to Board of Directors
Positive
Sep 14, 2026
On September 11, 2026, Graco Inc. announced that Richard B. Lewis, President and Chief Executive Officer of Donaldson Company, Inc., has been appointed to Graco’s Board of Directors, effective December 3, 2026. Lewis will join the class of d...
Business Operations and StrategyM&A Transactions
Graco Completes Acquisition of Valco Melton to Expand Portfolio
Positive
Sep 1, 2026
On August 31, 2026, Graco Inc. completed its $447 million cash acquisition of Valco Melton, a global provider of adhesive application and quality assurance systems, valuing the deal at about 14x 2025 adjusted EBITDA and roughly 10x estimated 2026 ...
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.