D.A. Davidson has increased its price objective for Franklin Electric (NASDAQ: FELE) to $100 from $90 while keeping a Neutral recommendation on the shares. The revised target is largely consistent with InvestingPro's Fair Value assessment, which indicates the stock may be modestly undervalued at the current market price of $93.89 despite the share price having fallen 17.28% over the past week.
The firm said it is maintaining its fiscal 2026 estimates and has published its first set of projections for fiscal 2027. The 2026 outlook incorporates targeted adjustments to assumptions around organic sales growth and operating margins across Franklin Electric's reportable segments. The analyst team models earnings per share of $4.63 for fiscal 2026 and revenue growth of roughly 4% for the year.
On market conditions, D.A. Davidson described overall end-market demand as favorable. The note highlights the company's ability to capture pricing and a broadly healthy order book heading into early 2026. Incoming orders, the firm said, support a low single-digit organic volume trajectory for the year - a projection that is stated as net of any weather-driven favorability or unfavorability.
This forward view builds on recent company results. Franklin Electric recorded trailing-12-month revenue of $2.13 billion and year-over-year revenue growth of 5.44% heading into the new fiscal period.
Balance-sheet metrics remain a focal point in the analysis. D.A. Davidson noted that Franklin Electric's free cash flow profile and liquidity provide capacity for additional mergers and acquisitions. The company is described as operating with a moderate debt load, with a Debt/Equity ratio of 0.18, and strong short-term liquidity shown by a current ratio of 2.79.
"We are maintaining our 2026E while introducing our initial 2027E, the former inclusive of some fine tuning in our organic sales growth and operating margin assumptions across each of FELE’s reportable segments."
The firm reiterated its Neutral stance alongside the updated $100 price target. InvestingPro data cited in the note shows that Franklin Electric has raised its dividend for 33 consecutive years and that management has been actively repurchasing shares.
Separately, the company reported fourth-quarter 2025 results that delivered earnings per share of $0.87, in line with expectations, while revenue of $506.9 million missed consensus of $516.25 million. The shortfall was attributed to volume weakness in the North America, Latin America, and Asia-Pacific Water Systems segments. D.A. Davidson previously maintained a Neutral rating and set a $90.00 price target following that earnings release, noting that reported sales were roughly $8 million below the firm's expectations.
Investors have focused on the cautious guidance issued for the coming year, and the performance of Franklin Electric in the affected regional Water Systems businesses remains a watchpoint for analysts and stakeholders. The firm's liquidity and cash generation profile, however, are presented as enabling further strategic actions such as M&A and continued capital return to shareholders.
Context and takeaways
- Price target increased to $100 from $90 while the Neutral rating is maintained.
- 2026 estimates left intact; initial 2027 projections introduced with tweaks to organic sales and margin assumptions.
- Q4 2025 EPS matched expectations but revenue missed, with volume weakness in multiple regional Water Systems segments.