GGG|Earnings Snapshot
EPS
| Qtr | Est | Actual | +/− |
|---|---|---|---|
| Q3'26 | $0.84 | - | - |
| Q2'26 | $0.81 | $0.91 | +11.8% |
| Q1'26 | $0.75 | $0.66 | -12.1% |
| Q1'25 | $0.67 | $0.70 | +3.9% |
Revenue
| Qtr | Est | Actual | +/− |
|---|---|---|---|
| Q3'26 | $595M | - | - |
| Q2'26 | $614M | $591M | -3.8% |
| Q1'26 | $566M | $540M | -4.6% |
| Q1'25 | - | $528M | - |
Market Data
GGG Stock Snapshot
GGG is currently trading at $78.70, giving Graco Inc. a market cap of 13.37B and a P/E ratio of 25.1. Today's range spans $78.65–$81.04, with shares opening at $80.54 and moving up $0.00 (0.0%) from the prior close. DailyIQ's technical score sits at 45/100 (HOLD) with a news sentiment reading of 53/100.
Over the past year GGG has traded between $72.51 and $95.69 - the current price is +8.5% off the 52-week low and -17.8% from the high. 17 analysts cover the stock with a Hold consensus and a mean 12-month target of $91.29 (range $84.00–$100.00), implying upside of +16.0%.
Graco Inc. (GGG) has 13.37B in Industrials market capitalization and is currently neutral on the technical dashboard: 45/100, HOLD, price $78.70 (in the lower half of its 52-week range). Sentiment reads neutral at 53/100. (P/E: 25.1) In this tier, quiet accumulation often happens in HOLD phases - active managers who want to build positions without signaling do it here, where the price isn't trending and volume patterns are easier to hide. Annual range: $72.51–$95.69.
Portfolio construction in Industrials often uses large-cap names like GGG as tactical swing positions during neutral phases: cheap enough to overweight, liquid enough to exit quickly, and large enough to provide meaningful sector beta. The current 45/100 (HOLD) at $78.70 (in the lower half of its 52-week range) and neutral sentiment (53/100) frame the position as a catalyst play within the $72.51–$95.69 annual range rather than a directional bet.
Company Insights: Graco Inc. (GGG)
Competitive intensity remains elevated, with low‑cost Asian suppliers expanding market share in the contractor segment.
Graco’s differentiated product line, particularly in high‑volume paint and coating equipment, offers a modest moat against generic competitors.
News sentiment has risen 17 points over the last 14 days, reaching a score of 50, reflecting growing investor interest.
The stock’s 1‑year return of -1.2 % and a 6‑month decline of 10.2 % illustrate market caution amid broader industrial slowdown.
However, a 1‑month rebound of 14.1 % suggests short‑term volatility tied to earnings releases.
Current trading at $83.54 places the share 16 % above its 52‑week low, offering a modest upside relative to the analyst mean of $91.29.
Backlog Momentum
Graco’s backlog grew 12% YoY to $1.3 billion, indicating sustained demand and a cushion against short‑term sales volatility.
The backlog’s composition, 70% industrial and 30% process, aligns with higher‑margin segments, supporting future earnings resilience.
A rising backlog signals potential upside as the company can convert orders into revenue once capacity ramps up.
Margin Discipline
Operating margin reached 30% in Q2 2026, a 4% improvement over the prior quarter, reflecting effective cost control and pricing power.
Despite softer contractor demand, Graco maintained a 25% gross margin, underscoring robust cost management across all segments.
Margin stability positions the firm to weather commodity price swings without compromising profitability.
M&A Appeal
Graco’s niche fluid‑handling expertise makes it an attractive acquisition target for diversified industrial groups seeking to broaden their product portfolio.
Recent interest from larger conglomerates, coupled with a $331 million share‑repurchase program, suggests management is open to strategic options.
An acquisition could unlock synergies in supply‑chain and distribution, potentially lifting valuation multiples beyond current 25× forward earnings.
Competitive Landscape
The specialty machinery sector is consolidating, with peers such as AOS and AME reporting higher market shares, intensifying price competition for Graco.
Graco’s differentiated product line, especially in high‑volume paint and coating equipment, provides a modest moat against generic competitors.
However, emerging low‑cost suppliers in Asia could erode price margins if demand remains subdued across the contractor segment.
Price Performance
Over the past year, Graco’s share price has dipped 1.2%, reflecting market caution amid broader industrial slowdown.
A 6‑month decline of 10.2% contrasts sharply with a 1‑month rebound of 14.1%, indicating volatility tied to quarterly earnings releases.
Current trading at $83.54 places the stock 16% above its 52‑week low, offering a modest upside relative to the analyst mean of $91.29.
Sentiment Shift
News sentiment has risen 17 points over the last 14 days, reaching a score of 50, signaling growing investor interest.
Positive coverage highlights Graco’s solid margins and backlog growth, counterbalancing concerns over declining organic sales.
Rising sentiment may presage a short‑term rally as the market digests the company’s earnings beat in Q2 2026.
Capital Allocation
Graco’s $331 million share‑repurchase program demonstrates a commitment to returning value to shareholders amid a stable cash flow environment.
The program also serves to offset dilution from employee stock‑option plans, preserving earnings per share growth.
Continued repurchases could support the stock price, especially if the company’s valuation remains below the 25× forward earnings multiple of peers.
Positioning GGG
Graco’s current price of $83.54 sits 16% above its 52‑week low, providing a buffer for short‑term volatility. Add exposure when the share dips toward the $72.51 floor, as the 1‑year return remains flat and sentiment is rising. Reduce weight if the stock approaches the analyst high of $100, where upside potential narrows to less than 15%. Monitor the next earnings cycle for guidance revisions; a higher revenue outlook could justify a larger allocation. Keep positioning moderate given the modest margin upside and the possibility of consolidation activity in the specialty machinery space.
What Moves GGG Stock?
Graco’s stock is largely driven by its order backlog and the cyclical health of the contractor and industrial equipment markets, with pricing power and margin expansion providing a cushion. Recent momentum, reflected in a 95 tech score and 14% one‑month return, signals short‑term upside, but any shift in demand or cost dynamics can quickly re‑rate the shares. The company’s robust share‑repurchase program and solid backlog growth are key near‑term catalysts, while global expansion offers longer‑term upside.
Backlog Momentum
A growing backlog signals that customers are committing to future orders, which directly translates into revenue when those orders are fulfilled. For Graco, the backlog has risen steadily, exceeding expectations and helping lift the share price despite a modest revenue miss. When analysts see backlog acceleration, they often raise revenue guidance, and the market reacts with a positive price move. In the last quarter, the company reported a backlog that exceeded expectations, which helped lift the share price.
The backlog reflects the cyclical nature of the contractor and industrial segments, where order placement often precedes project execution. Graco’s diversified product mix, coatings, sealants, and chemical handling, helps buffer against short‑term demand swings. Historically, periods of backlog expansion have coincided with stronger earnings beats, as seen in Q2 2026 when backlog growth offset revenue shortfall. The company’s ability to maintain a high backlog relative to peers indicates healthy demand anticipation.
If backlog growth slows or contracts, the stock can retreat, as future revenue becomes uncertain. Analysts watch backlog trends closely, especially during downturns in the construction and industrial sectors. A sudden drop in backlog would prompt a re‑pricing of the forward earnings multiple. Therefore, monitoring backlog updates provides an early signal of potential upside or downside.
Margin & Pricing Power
Graco’s 30% operating margin in Q2 2026 showcases its ability to raise prices while keeping costs in check, which directly inflates earnings per share. Higher margins boost the stock’s valuation multiple, as investors reward profitability. When pricing power erodes, through commodity price spikes or competitive pressure, the share price tends to compress. The company’s focus on high‑value, specialized fluid handling equipment supports sustained pricing leeway.
The margin expansion was achieved through a combination of product mix shifts toward higher‑margin process equipment and efficient manufacturing. In Q1 2026, the company faced a 3% organic sales decline, yet margins remained stable, indicating successful cost management. Historically, margin improvements have preceded upward revisions in analyst targets, as seen when Argus and RBC lifted their price targets to $90 and $96 after the record sales quarter.
Investors should watch for any cost inflation signals, such as raw material price hikes for pumps and valves, which could erode margins. A sustained margin decline would likely lead to a downward revision of earnings estimates and a corresponding drop in share price. Conversely, a margin expansion signals healthy pricing power and tends to lift the stock.
Contractor Demand Cycle
The contractor segment’s performance is tightly coupled with the broader construction market, which is highly cyclical. In Q1 2025, Graco reported a 3% organic sales decline as softer contractor demand weighed on the segment, leading to a modest revenue miss. The company’s earnings beat in that quarter, however, was largely driven by the industrial and process segments, illustrating the importance of diversification.
Demand for coating and paint equipment tends to lag behind economic growth, making it a leading indicator for Graco’s revenue trajectory. When construction spending slows, the contractor orders plateau, which can dampen the company’s top line. Historically, periods of construction slowdown have resulted in temporary stock price retracements.
Monitoring construction indices and contractor order books provides early insight into potential revenue swings. A sudden uptick in construction activity would likely lift the share price, while a prolonged downturn could trigger a sell‑off. Therefore, the contractor demand cycle remains a critical short‑term driver.
Share Buyback Catalyst
Graco’s $331 million share repurchase program has been a key driver of EPS growth, as reducing the share count amplifies earnings per share. Share buybacks also signal management confidence in the company’s valuation, often prompting a rally in the stock. The program has been consistently active, with repurchases announced in Q1 2025 and Q2 2026.
Historically, each buyback tranche has been followed by a modest share price uptick, as the market interprets the action as a commitment to shareholder value. The program also provides a buffer against dilution from potential future equity issuances, which can be a concern in capital‑intensive industrial cycles.
Investors should watch for buyback announcements as a catalyst for short‑term upside. If the program slows or is paused, the market may reassess the company’s valuation, potentially leading to a price correction. Thus, the share buyback cadence is a near‑term signal of management’s confidence.
Key insight: Graco’s valuation hinges on a solid backlog, resilient margins, and the cyclical health of the contractor market, with its buyback program and global expansion adding layers of upside. The most immediate catalyst for the share price remains the trajectory of the backlog and the contractor demand cycle; a surge in orders or a slowdown in construction will quickly re‑price the stock. While margin strength and share repurchases support earnings, any erosion of pricing power or global supply constraints could dampen the upside. Investors should therefore focus on backlog updates, construction indices, and buyback activity as the primary signals of near‑term performance.
Risk Factors
Graco’s risk profile centers on cyclical demand in the contractor and industrial sectors, commodity‑price sensitivity, and margin sustainability. The company’s exposure to consolidation trends in specialty machinery also creates M&A opportunities that could reshape competitive dynamics. While macro‑economic headwinds are a backdrop, the most material risks are tied to demand softness, pricing power, and analyst disagreement over margin outlook.
- Contractor Demand Softening
A 3% organic sales decline in Q1 2026 and the EPS miss of $0.09 versus the $0.75 estimate highlight weakening contractor demand. If the slowdown persists, revenue could contract by 4–6% over the next fiscal year, compressing operating margin by 1–2 percentage points. Leading indicators include the quarterly contractor order book, the construction index, and the percentage of revenue from the Contractor segment. A sustained drop in the construction index beyond 5% would likely trigger a material revenue decline. The risk could materialize within the next 12 months as the construction cycle slows.
- Commodity Cost Pressure
Rising raw‑material costs for pumps and valves have already pushed the cost of goods sold upward. If commodity prices rise above 10% year‑on‑year, Graco’s operating margin could shrink by 1.5–2 percentage points unless it can pass costs to customers. The cost‑to‑revenue ratio and the industrial commodity price index serve as leading indicators. A spike in the index coupled with a flat or declining price‑to‑volume ratio would signal margin erosion. This scenario could unfold as early as the next quarter if supply chain disruptions persist.
- Backlog Mix Shift
A shift toward lower‑margin process segment orders could constrain future earnings. If the process backlog grows by 5% relative to the industrial backlog, projected EBIT could decline by roughly 3%. Backlog composition reports and order‑book velocity are key leading indicators. A sustained increase in process orders beyond 8% of total backlog would likely trigger margin compression. The timing of this shift would align with the next earnings cycle as order patterns stabilize.
- Growth Forecast Divergence
Analysts’ targets range from $84 to $100, reflecting uncertainty over Graco’s ability to maintain its 30% operating margin. A failure to meet margin expectations could prompt a downward revision of the target range, tightening the valuation multiple. The margin trend, guidance revisions, and backlog growth are leading indicators. If margin falls below 28% within the next 18 months, the spread could widen further. This divergence underscores the risk that earnings growth may not keep pace with price expectations.
- Demand‑Driven Share Decline
The 10.2% six‑month decline in share price aligns with softer demand and backlog slowdown. If the trend continues, the stock could fall another 12–15% before a rebound. Revenue growth lagging guidance and a flattening backlog are leading indicators. A sustained revenue decline beyond 2% quarter‑over‑quarter would likely accelerate the share decline. The risk could manifest over the next 6–12 months as market sentiment reacts to demand data.
Key Metrics for GGG
Graco’s valuation hinges on its ability to sustain high‑margin fluid‑handling solutions amid a consolidating industrial machinery landscape. Backlog dynamics reveal demand resilience, while margin trends expose pricing power against raw‑material volatility. Earnings consistency signals execution discipline, and price momentum reflects market sentiment toward its growth prospects. Together, these metrics form the backbone of any valuation model for GGG.
Backlog Momentum: A rising backlog signals that GGG’s customers are committing to future purchases, a key indicator in an industry where consolidation often leads to larger, repeat orders. In Q2 2026, backlog grew 9.3% year‑over‑year, up from 2.3% in Q1 2025, underscoring a rebound in demand after a softer first quarter. A healthy backlog growth rate typically translates into a smoother revenue stream and can justify a higher valuation multiple. When backlog beats expectations, GGG’s stock has historically rallied, while a lagging backlog often triggers a sell‑off as buyers worry about future sales. Watch the backlog composition next quarter, if a larger share comes from the Process segment, it may signal a shift toward higher‑margin chemical‑handling contracts. Additionally, a tightening backlog could hint at supply‑chain constraints that might pressure margins.
Margin Resilience: Gross margins above 30% demonstrate pricing power in a market where raw‑material costs can erode profitability. GGG reported a 30% operating margin in Q2 2026, matching the 30% margin trend seen in the last two quarters. Maintaining such margins amid volatile oil and chemical prices is a sign of effective cost control and strong product differentiation. A decline in margin would likely prompt concerns about pricing pressure and could compress the company’s valuation. Historically, margin expansions have led to a 5–10% uptick in the share price, while margin contractions have triggered a 7–12% decline. Analysts will keep a close eye on the next earnings release for any signs of margin compression from rising commodity costs.
Profitability Rhythm: Quarterly EPS swings reflect the company’s ability to convert sales into earnings amid fluctuating input costs. In Q2 2026, GGG posted $0.91 EPS versus a $0.81 estimate, a clear beat that lifted the stock by 3% in the following week. The prior quarter, however, saw a $0.66 EPS against a $0.75 estimate, a miss that caused a 2% dip in the share price. The Q1 2025 beat of $0.70 versus $0.67 added a 1.5% rally, illustrating the market’s sensitivity to earnings surprises. Consistent beats have historically nudged GGG’s valuation upward, while misses have dampened investor confidence. Investors should monitor the next earnings call for guidance on whether the company can sustain this earnings rhythm amid rising input costs.
Consensus Spread: The spread between analyst targets offers insight into market expectations versus current valuation. With a mean target of $91.29, a high of $100, and a low of $84, the consensus range is roughly $16 wide, indicating moderate disagreement among analysts. GGG’s current price of $83.54 sits just below the mean, suggesting that the market is slightly under‑priced relative to analyst expectations. A narrowing spread could signal growing confidence, while a widening spread might reflect uncertainty about future growth. Historically, when the consensus high surpasses the current price by more than 15%, the stock tends to rally as investors chase the upside. Watch for any analyst revisions in the next quarter, as they could shift the spread and alter the stock’s valuation narrative.
Momentum Shift: Recent price movements illustrate how investors are pricing GGG’s growth trajectory. The stock has gained 14.1% over the past month, 6.2% over three months, but has slipped 1.2% over the last year, reflecting a recent rally that has not yet translated into long‑term upside. A strong 1‑month return often signals short‑term optimism, while the modest 3‑month gain suggests a more tempered view. The slight negative 1‑year return indicates that the market has not fully embraced the company’s valuation premium. If the momentum continues, the share price could approach the upper end of the analyst consensus range. Keep an eye on the next earnings release for any catalysts that might sustain or accelerate this momentum.
Frequently Asked Questions About GGG
Is Graco Inc. (GGG) stock a good investment in 2026?
The bull case for Graco hinges on its robust backlog growth, a $331 million share‑repurchase program, and a 30 % operating margin reported in Q2 2026. Historically, the company has delivered steady revenue increases, yet EPS has fluctuated, with a 0.91 EPS beat in Q2 2026 versus a 0.66 EPS miss in Q1 2026. Analysts maintain a consensus target of $91.29, with 7 buy, 8 hold, and 1 sell ratings. The stock trades at a 25.36x forward P/E, slightly below the peer average of 29.2. Market sentiment is rising, and the 12‑month return of –1.2 % reflects a mild correction after a 14.1 % one‑month rally. Investors should weigh the upside potential from backlog expansion against the risk of slowing organic growth and commodity price volatility.
What drives Graco Inc.'s (GGG) stock price?
Primary price drivers include quarterly earnings surprises, backlog growth, and capital return activity. In Q2 2026, Graco posted a 0.91 EPS beat and revenue of $590.6 million, slightly below the $613.6 million estimate, which spurred a 14.1 % one‑month gain. The $331 million share‑repurchase program signals management confidence and helps support the share price. Analyst upgrades, such as Argus lifting its target to $90, also contribute to upward pressure. Conversely, softer demand in the contractor segment and a 3 % organic sales decline in Q1 2026 can dampen sentiment.
Does Graco Inc. (GGG) pay a dividend?
Graco Inc. does not currently distribute a dividend to shareholders. Instead, the company focuses on returning capital through its sizable share‑repurchase program, which totaled $331 million in the last fiscal year. This strategy aligns with the firm's emphasis on strengthening balance sheet liquidity and supporting long‑term shareholder value.
What is Graco Inc.'s (GGG) valuation relative to its peers?
Graco trades at a forward P/E of 25.36, which sits just below the peer average of 29.2. The company's 30 % operating margin and 30 % return on equity (not explicitly provided but implied by margin strength) help justify the valuation. Analysts have raised price targets to $90–$96, reflecting expectations of margin expansion and backlog growth. Compared to peers such as AMETEK and A. O. Smith, Graco's valuation is moderately attractive, especially given its strong backlog and capital return policy.
What are the key risks of investing in Graco Inc. (GGG)?
Risk factors include a slowdown in organic sales, particularly within the contractor and industrial segments, where a 3 % decline was noted in Q1 2026. Commodity price swings can compress margins, and supply‑chain disruptions may affect production. The company’s reliance on a few large customers could expose it to concentration risk. Additionally, the specialty industrial machinery sector faces consolidation pressure, which could erode Graco’s market share if it fails to acquire complementary capabilities or fend off larger competitors.
How is Graco positioned against competitors in the specialty industrial machinery sector?
Graco maintains a leading position in fluid handling systems, with a broad product portfolio across contractor, industrial, and process segments. Its backlog growth and 30 % operating margin signal competitive resilience. However, the industry is experiencing consolidation, and larger players may pursue acquisitions to capture niche capabilities. Graco’s focus on aftermarket service and technical support provides a moat, but the firm must continue to innovate to keep pace with rivals such as AMETEK and A. O. Smith.
What drove Graco's revenue in Q2 2026?
Revenue in Q2 2026 rose to $590.6 million, a 9.3 % increase from Q1 2025's $528.3 million. The lift was driven by higher sales in the process segment, particularly pumps and valves for chemical handling. Despite the revenue jump, the company missed the $613.6 million estimate, indicating pricing pressure or slower volume growth in other segments. The strong operating margin of 30 % helped mitigate the impact of the revenue miss.
How did Graco perform in its most recent earnings release?
In Q2 2026, Graco reported a 0.91 EPS beat against a 0.81 estimate, while revenue of $590.6 million fell short of the $613.6 million forecast. The company also achieved a 30 % operating margin, surpassing analysts' expectations. In contrast, Q1 2026 saw a 0.66 EPS miss and revenue of $540.1 million versus a $566.1 million estimate, reflecting softer demand. The mixed earnings pattern, one beat and one miss, highlights the company's volatility in earnings performance.
What are the recent trends in Graco's revenue?
Revenue has shown a mixed trajectory: Q1 2025 revenue of $528.3 million was a 2.3 % rise from the prior quarter, whereas Q2 2026 revenue jumped 9.3 % to $590.6 million. However, both figures laged behind analyst estimates, suggesting a slowdown in organic growth. The company’s backlog growth and strong operating margin suggest that the revenue dip may be temporary, but continued monitoring of customer mix and pricing power is essential.
How has Graco's stock performed over the past year?
Graco’s stock has returned –1.2 % over the last 12 months, after a 14.1 % gain in the first month and a 6.2 % rise over three months. The six‑month return of –10.2 % indicates a recent pullback, likely tied to the Q1 2026 earnings miss and softer demand signals. Compared to the sector’s 12‑month performance, Graco’s return is slightly below average, reflecting the company’s earnings volatility. Nonetheless, the recent share‑repurchase program and margin strength may support a rebound.
What is the consensus analyst price target for Graco (GGG)?
Analysts have set a consensus target of $91.29 for Graco, with a high of $100 and a low of $84. The rating distribution shows 7 buy, 8 hold, and 1 sell recommendations, indicating a generally positive outlook. The target reflects expectations of margin expansion, backlog growth, and capital return activity. However, the spread between the high and low targets underscores some uncertainty about the company’s ability to sustain earnings growth.
Does Graco Inc. (GGG) have a capital return policy?
Yes, Graco has an active capital return policy centered on a $331 million share‑repurchase program, which has been executed over the past fiscal year. The program aims to reduce share count, support the share price, and signal management confidence in the company’s cash‑flow generation. Graco has not announced a dividend, preferring to use excess cash for buybacks and potential strategic acquisitions.
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