Wachovia Ups Parker-Hannifin to Market Perform

Analyst Wendy Caplan sees third-quarter earnings above estimates due to strong volumes and lower costs

Wachovia upgraded Parker-Hannifin (PH ) to market perform.

Analyst Wendy Caplan say she sees third-quarter earnings per share above estimates due to strong volumes on a lower cost basis. A particularly strong March evidently resulted in 15% revenue growth in the third quarter.

However, Caplan still thinks there's significant execution risk at the company, and worries about a characteristic flight to quality by investors at roughly this point of the economic cycle. As such, she reluctantly upped the $2.20 fiscal 2004 (Jun.) earnings per share estimate to $2.50 and upped the $2.80 fiscal 2005 estimate to $3.00.

She also upgraded Parker-Hannifin from underperform, and lifted the 60 cents third-quarter earnings per share estimate to 80 cents to meet the company's new guidance. Caplan notes third-quarter results are due out Apr. 19.