/Pentair%20plc%20logo%20on%20building-by%20JHVEPhoto%20via%20Shutterstock.jpg)
Headquartered in London, Pentair plc (PNR), with a market cap of $14.1 billion, is a global provider of innovative water solutions. The company operates through its Flow, Water Solutions, and Pool segments, delivering a wide array of smart and sustainable products to meet the needs of residential, commercial, and industrial customers around the world.
Shares of the water titan have slightly surpassed the broader market over the past year. PNR stock has soared 27.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27%. However, in 2024, PNR surged 15.9% compared to SPX's 16.8% return on a YTD basis.
Zooming in further, PNR’s outperformance looks more pronounced when compared to the Invesco Global Water ETF (PIO), which has returned 18.5% over the past year and 4.5% on a YTD basis.
Pentair's market outperformance stems from successful restructuring efforts, particularly its 80/20 initiatives, which have improved operational efficiency and profitability. The company’s resilience in navigating challenges in the housing and pool markets, combined with its strategic focus on high-margin segments like pools, has strengthened investor confidence. Additionally, as a dividend aristocrat with 48 consecutive years of dividend increases, Pentair's long-standing commitment to shareholder returns further reinforces its appeal.
Adding to the bullish momentum, PNR stock surged 9% on July 23, making it the top percentage gainer on the S&P 500. The jump followed the company’s strong Q2 earnings report and an upward revision of its full-year adjusted EPS guidance to approximately $4.25, up from the previous range of $4.15 to $4.25.
For the current fiscal year, ending in December 2024, analysts project Pentair’s EPS to grow 13.3% annually to $4.25 on a diluted basis. The company has a strong track record of outperforming expectations, having surpassed the consensus estimate in each of the last four quarters, including a 6.1% beat in the most recent quarter.
Among the 18 analysts covering Pentair stock, the consensus rating is a “Moderate Buy.” That’s based on 10 “Strong Buy” ratings, one “Moderate Buy,” and seven “Holds.”
This configuration is less bullish than two months ago, with 11 analysts advising a “Strong Buy.”
On July 24, RBC Capital raised Pentair's price target to $101 from $99 while maintaining an “Outperform” rating. Despite challenges highlighted by distributors, Pentair delivered a Q2 beat-and-raise. The firm also noted that Pentair is still early in its 80/20 deployment, with financial benefits expected in 2025.
The mean price target of $95 represents a 12.7% premium to PNR’s current price levels. The Street-high price target of $101 suggests an upside potential of 19.8%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
