/Pool%20Corporation%20site%20magnified-by%20Casimiro%20PT%20via%20Shutterstock.jpg)
With a market cap of nearly $14 billion, Pool Corporation (POOL) is a leading global distributor of swimming pool supplies, equipment, and related outdoor leisure products. The Covington, Louisiana-based company serves pool builders, remodelers, specialty retailers, and landscape contractors worldwide.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Pool Corporation fits this criterion perfectly. POOL's uniqueness lies in its vast scale and ability to supply an extensive range of pool and outdoor living products, supported by a highly localized distribution network that empowers its sales centers with full operational control.
However, the swimming pool supply company pulled back 12.9% from its 52-week high of $422.73, achieved in March. Shares of Pool Corporation have risen nearly 9% over the past three months, marginally outpacing the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 8.8% gain over the same time frame.
Nevertheless, longer term, POOL stock is down 7.6% on a YTD basis, lagging behind XLY’s 11.1% rise. Moreover, shares of Pool Corporation have gained 7.2% over the past 52 weeks, compared to XLY’s 23.5% increase over the same time frame.
POOL stock has been trading below its 200-day moving average since late May but has remained above its 50-day moving average since late July despite some fluctuations.
Pool Corporation stock declined in the first half of 2024 due to a significant downgrade in expectations for new pool construction and remodeling activity. In addition, a decrease in revenue from discretionary spending reflected homeowners' reluctance to invest in large-ticket items, driven by challenging conditions in the housing market.
However, the stock jumped over 10% on Jul. 25 due to better-than-expected Q2 adjusted EPS of $4.98 and revenue of $1.8 billion, driven by steady demand for pool maintenance products and slightly higher supply prices. Plus, the company raised its full-year earnings guidance to $11.05 per share - $11.45 per share, which positively influenced investor sentiment.
Its rival, A. O. Smith Corporation (AOS), has outperformed POOL. Shares of AOS have surged 30.2% over the past 52 weeks and 1.9% on a YTD basis.
Despite POOL’s relatively weak price action over the past year, analysts are moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 12 analysts in coverage, and it is currently trading above the mean price target of $359.70.
On the date of publication, Sohini Mondal 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.
