GET DAILY SIGNALSGraco Inc. (GGG) Delivers Record Q3 Sales but Shares Drop -7% on Mixed Results
Key Takeaways
- Graco reported record third-quarter net sales of $586.4 million, up 8% year over year from $543.4 million.
- Adjusted earnings per share (EPS) rose 5% to $0.81, but came in slightly below analyst consensus estimates.
- Reported net earnings declined 12% to $121.6 million, or $0.75 per diluted share, partly due to a non-recurring gain in the prior-year quarter.
- Fourth-quarter revenue guidance of $610 million to $640 million landed below Wall Street expectations.
- Shares fell about 7% in after-hours trading following the mixed results and softer outlook.
Why This Quarter Matters for Graco
Graco Inc. (GGG) designs and manufactures fluid-handling equipment for industrial and commercial uses. Its third-quarter 2026 results provide insight into end markets such as professional paint, powder finishing, semiconductor applications, and general industrial activity. The company has relied on acquisitions and share repurchases to drive growth amid softer housing and construction demand. Management had noted improving order trends earlier in the year, so this report tested whether that momentum carried through to stronger performance and shaped the full-year outlook.
Reviewing the Reported Figures
For the third quarter of 2026 ended September 25, Graco posted net sales of $586.4 million, an 8% rise from $543.4 million the prior year. Organic growth contributed about 4 percentage points, with acquisitions adding the remaining 4 points. Reported operating earnings fell 10% to $148.1 million due to a $14 million non-cash gain from reduced acquisition-related contingent consideration that did not recur. Adjusted operating earnings increased 1% to $160.9 million on a non-GAAP basis.
Net earnings declined 12% to $121.6 million, or $0.75 per diluted share, versus $137.6 million, or $0.82 per share, a year earlier. Adjusted diluted EPS rose 5% to $0.81 from $0.77. The adjusted result missed consensus estimates of roughly $0.83 to $0.84, while revenue fell just short of the approximately $590 million consensus. The company repurchased $132 million of shares in the quarter and $463 million year to date.
Market Reaction to the Release
Investors reacted cautiously despite record sales and higher adjusted EPS. Both headline numbers missed consensus slightly, and the fourth-quarter revenue outlook came in below expectations. Shares declined roughly 7% in after-hours trading. The response indicates the market focused more on the earnings shortfall and softer guidance than on the year-over-year sales growth. Management described the quarter as solid and broad-based, citing a 7% increase in incoming organic orders, yet the mixed results tempered sentiment for the rest of the year. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Outlook and Factors Worth Monitoring
Graco guided to fourth-quarter 2026 revenue of $610 million to $640 million, with a midpoint of about $625 million below the analyst consensus of roughly $648 million. Investors will track whether organic orders, which rose 7% in the third quarter and 4% year to date, continue to strengthen. Margin trends are another focus area. Reported operating margin narrowed year over year partly due to the non-recurring prior-year gain, while higher product costs and tariffs have pressured profitability. Management has highlighted price realization as a potential offset. Graco also announced a licensing agreement with ABB to extend its Transverse Flux Motor technology into data center cooling towers, with initial installations targeted by the end of 2029. This longer-term move aims to capture data center demand, and together with repurchases and acquisition contributions, these elements will influence views on growth into 2027.
Using AI Tools in My Research Process
In my analysis of industrial names like Graco, I often turn to Tickeron’s AI Screener to quickly filter peers by fundamentals, technical patterns, and performance metrics. It helps surface comparable setups across the sector without manual effort and supports a more efficient review of order trends and margin drivers. This kind of tool has become a regular part of how I cross-check company-specific data against broader industry signals.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
GGG in upward trend: 10-day moving average broke above 50-day moving average on October 15, 2026
The 10-day moving average for GGG crossed bullishly above the 50-day moving average on October 15, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 9 of 14 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 64%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 08, 2026. You may want to consider a long position or call options on GGG as a result. In 46 of 93 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 49%.
The Moving Average Convergence Divergence (MACD) for GGG just turned positive on September 22, 2026. Looking at past instances where GGG's MACD turned positive, the stock continued to rise in 25 of 46 cases over the following month. The odds of a continued upward trend are 54%.
GGG moved above its 50-day moving average on October 13, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +1.88% 3-day Advance, the price is estimated to grow further. Considering data from situations where GGG advanced for three days, in 147 of 315 cases, the price rose further within the following month. The odds of a continued upward trend are 47%.
The Aroon Indicator entered an Uptrend today. In 79 of 211 cases where GGG Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 37%.
Bearish Trend Analysis
The 10-day RSI Indicator for GGG moved out of overbought territory on October 19, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 30 similar instances where the indicator moved out of overbought territory. In 14 of the 30 cases, the stock moved lower in the following days. This puts the odds of a move lower at 47%.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 5 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where GGG declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 52%.
GGG broke above its upper Bollinger Band on October 13, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 45 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 46 (best 1 - 100 worst), indicating steady price growth. GGG’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 57 (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 66 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 75, placing this stock slightly better than average.
The Tickeron Valuation Rating of 81 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (5.206) is normal, around the industry mean (4.503). P/E Ratio (25.105) is within average values for comparable stocks, (38.302). Projected Growth (PEG Ratio) (2.334) is also within normal values, averaging (1.879). Dividend Yield (0.015) settles around the average of (0.029) among similar stocks. P/S Ratio (5.643) is also within normal values, averaging (186.943).
The Tickeron Seasonality Score of 85 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
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General Information
a manufacturer of commercial fluid control systems and air compressors
Industry IndustrialMachinery
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