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Graco
(NYSE:GGG)
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Rating:74Outperform
Price Target:
$86.00
â–²(8.04% Upside)
Action:Reiterated
Date:09/14/26
The score is driven primarily by strong financial quality (high margins, strong ROE, very low leverage, solid cash conversion) and a positive earnings-call setup (improving bookings/backlog and maintained guidance). Offsetting these strengths, technicals are notably weak with the stock below key moving averages and negative MACD, and valuation is fair rather than clearly discounted given the ~23.7 P/E and ~1.5% yield.
Positive Factors
High profitability and earnings quality
Graco’s high gross, operating, and net margins indicate meaningful pricing power, efficient execution, and differentiated engineered products. This profitability provides resilience across cycles and supports continued investment in innovation, market expansion, and shareholder returns.
Negative Factors
Cyclical and lumpy project timing
Dependence on project-based Industrial orders can make revenue recognition uneven and reduce forecasting visibility even when underlying demand remains intact. Repeated timing swings may produce quarter-to-quarter volatility in sales, capacity utilization, and operating leverage.
Read all positive and negative factors
Positive Factors
Negative Factors
High profitability and earnings quality
Graco’s high gross, operating, and net margins indicate meaningful pricing power, efficient execution, and differentiated engineered products. This profitability provides resilience across cycles and supports continued investment in innovation, market expansion, and shareholder returns.
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
$12.67B
Dividend Yield1.48%
Average Volume (3M)2.12M
Price to Earnings (P/E)24.4
Beta (1Y)0.73
Revenue Growth4.58%
EPS Growth12.51%
CountryUS
Employees4,400
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)3.23
Shares Outstanding161,953,830
10 Day Avg. Volume1,393,085
30 Day Avg. Volume2,121,184
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 Cap0.96
Enterprise Value/Revenue5.39
Enterprise Value/Gross Profit10.23
Enterprise Value/Ebitda16.14
Forecast
1Y Price Target
$95.00Price Target Upside19.35% Upside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)3.28
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 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:Jul 22, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 21, 2026
Earnings Call Sentiment Positive
The call emphasized multiple positive operating and financial trends: record revenue and earnings, double-digit adjusted EPS growth, meaningful margin expansion, strong cash generation, improving orders and backlog, and strategic M&A (VELCRO Meltan). Notable challenges were timing-related weakness in Industrial (powder finishing) and slower Asia/China activity, plus a modest one-time tariff refund contribution to margins and a small organic sales decline driven by timing. Management maintained full-year outlook, provided Q3 revenue range, and signaled confidence in a stronger second half driven by backlog, bookings and new product initiatives.Positive Updates
Record Quarterly Sales and Earnings
Reported record Q2 sales of $591 million, up 3% year-over-year. Reported net earnings of $145 million, or $0.87 per diluted share (+14% YoY). Adjusted EPS of $0.91, up 17% YoY.
Negative Updates
Negative Organic Sales Impact
On a reported basis acquisitions added 3% and currency added 1%, offsetting a 1% unfavorable change in organic sales in Q2 (driven primarily by timing of finishing systems revenue in Industrial). Q1 organic decline was referenced as ~6% due to backlog timing.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Sales and Earnings
Reported record Q2 sales of $591 million, up 3% year-over-year. Reported net earnings of $145 million, or $0.87 per diluted share (+14% YoY). Adjusted EPS of $0.91, up 17% YoY.
Read all positive updates
Company Guidance
Graco maintained its full‑year outlook and initiated third‑quarter revenue guidance of $580–$600 million (excluding VELCRO Meltan, expected to close in Q3), citing confidence in a stronger second half supported by a $57 million (28%) backlog increase year‑to‑date (ex‑acquisitions), organic orders +5% in Q2, and a most‑recent 6‑week bookings average up 14%; segment booking drivers included contractor bookings +4% in the quarter (6‑week +14%), industrial bookings +3% year‑to‑date (6‑week +11%), and expansion market bookings +58% in Q2 (YTD +33%, 6‑week +36%). At current FX, currency is expected to add ~1% to full‑year sales and earnings; guidance items include unallocated corporate expenses of $39–42 million, full‑year capital expenditures of $90–100 million (H1 capex $29 million), and an adjusted effective tax rate of 20–21%. Management pointed to strong cash generation ($298 million operating cash flow through six months), disciplined capital returns (4.2 million shares repurchased for ~$331 million and $898 million of dividends in H1), and margin momentum (Q2 operating margin 30% vs. 26% a year ago, gross margin +130 bps aided by $9 million of tariff refunds); VELCRO Meltan was described as a strategic, high‑margin tuck‑in (gross margin >50%, ~20% starting EBITDA).Graco Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
92
Very Positive
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.27B | 2.24B | 2.11B | 2.20B | 2.14B | 1.99B |
| Gross Profit | 1.19B | 1.17B | 1.12B | 1.16B | 1.06B | 1.03B |
| EBITDA | 756.29M | 751.53M | 678.86M | 686.59M | 641.62M | 578.00M |
| Net Income | 533.55M | 521.84M | 486.08M | 506.51M | 460.64M | 439.87M |
Balance Sheet | ||||||
| Total Assets | 3.13B | 3.27B | 3.14B | 2.72B | 2.44B | 2.44B |
| Cash, Cash Equivalents and Short-Term Investments | 507.57M | 624.08M | 675.34M | 537.95M | 339.20M | 624.30M |
| Total Debt | 45.23M | 60.96M | 48.65M | 50.06M | 126.59M | 226.11M |
| Total Liabilities | 607.76M | 620.34M | 555.08M | 497.78M | 579.25M | 733.86M |
| Stockholders Equity | 2.52B | 2.65B | 2.58B | 2.22B | 1.86B | 1.71B |
Cash Flow | ||||||
| Free Cash Flow | 617.23M | 637.92M | 514.96M | 466.24M | 176.23M | 323.33M |
| Operating Cash Flow | 661.22M | 683.59M | 621.70M | 651.02M | 377.39M | 456.90M |
| Investing Cash Flow | -170.69M | -172.80M | -342.81M | -185.27M | -226.82M | -153.30M |
| Financing Cash Flow | -844.91M | -576.05M | -139.86M | -268.01M | -434.40M | -57.14M |
Graco Technical Analysis
Positive
79.60
Price Trends
79.09
Negative
77.16
Positive
81.35
Negative
Market Momentum
0.03
Negative
51.45
Neutral
47.62
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GGG, the sentiment is Positive. The current price of 79.6 is above the 20-day moving average (MA) of 77.54, above the 50-day MA of 79.09, and below the 200-day MA of 81.35, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 51.45 is Neutral, neither overbought nor oversold. The STOCH value of 47.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 | $18.28B | 33.31 | 17.59% | 1.04% | 7.02% | 24.24% | |
76 Outperform | $30.55B | 32.21 | 9.46% | 0.10% | 7.85% | 88.74% | |
74 Outperform | $12.67B | 24.36 | 20.27% | 1.48% | 4.58% | 12.51% | |
72 Outperform | $9.19B | 25.17 | 16.63% | 1.20% | -0.26% | 29.38% | |
70 Outperform | $17.27B | 33.61 | 12.91% | 1.24% | 7.32% | 12.36% | |
67 Neutral | $25.43B | 22.61 | 15.00% | 1.10% | 7.56% | -49.98% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
GGG
Graco
78.21
-1.68
-2.10%
DOV
Dover
188.83
29.30
18.37%
FLS
Flowserve
72.28
22.67
45.70%
IEX
IDEX
234.29
75.63
47.67%
NDSN
Nordson
328.17
100.49
44.13%
IR
Ingersoll Rand
78.75
2.73
3.59%
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 ...
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...
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.