Checking on the valuation of Donaldson Company, Inc. (NYSE:DCI) shares, we can focus on several ratios. One of the quickest ways to determine the projected value of a stock is the price to earnings growth, or PEG ratio. This formula was popularized by Peter Lynch and according to his calculations, a stock which is fairly valued will have a price to earnings ratio equal to its rate of growth. Simply put, a stock with a PEG ratio of 1 would be considered fairly valued. A stock with a ratio of under 1.0 would be undervalued and a stock with a PEG over 1.0 would be considered over valued. Donaldson Company, Inc. currently has a PEG ratio of 3.20, which indicates that is it overvalued if looking at this metric alone.
Most importantly investors want to know where the stock is headed from here. In order to get a sense of Wall Street sentiment, we can look to equity research analyst estimates. On a one to five ratings scale where 1.0 indicates a Strong Buy, 2.0 indicates a Buy, 3.0 a Hold, 4.0 a Sell and 5.0 a Stong Sell. Donaldson Company, Inc. (NYSE:DCI) currently has an average analyst recommendation of 2.50 according to analysts. This is the average number based on the total brokerage firms taken into consideration by Beta Systems Research. The same analysts have a future one-year price target of $14.37 on the shares.
In addition to sell-side rational, we can also take a look at some technical indicators. The stock is currently -0.96% away from its 50-day simple moving average and 11.05% away from the 200 day average. Based on a recent trade, the shares are -5.41% away from the 52-week high and 47.28% from the 52-week low. The RSI (Relative Strength Index), which shows price strength by comparing upward and downward close to close movements. An RSI approaching 70 is typically deemed to be nearing overbought status and could be ripe for a pullback. Alternatively an RSI nearing 30 indicates that the stock could be getting oversold and might be considered undervalued. The RSI for Donaldson Company, Inc.(NYSE:DCI) currently stands at 47.57.
Donaldson Company, Inc. has posted trailing 12 months earnings of $1.42 per share. The company has seen a change of -5.20% earnings per share this year. Analysts are predicting 8.72% for the company next year. The firm is yielding 10.60% return on assets and 25.40% return on equity.