Trying to find buying opportunities in stocks these days is a bit of a challenge. With the chickens seemingly coming home to roost and a long-delayed recession brewing up, getting a stock worth buying now is proving tough. But for Pentair stock (PNR), this water treatment operation could be a major buy, at least, that is what Baird analysts had to say recently. And buy many investors did, sending shares up nearly 2% in Tuesday afternoon’s trading.
Baird analyst Michael Halloran, who has essentially a five-star rating on TipRanks, upgraded Pentair from Neutral to Outperform, and also hiked the price target to $114 per share, which represents 27% upside potential against the closing price on Monday.
So what stood out for Halloran? The clear winning point is how far shares have dipped already; Pentair shares are down 11% so far this year, which is light years ahead of the 2% loss that the S&P 500 as a whole has posted. That by itself would not mean so much, Halloran points out, except that Pentair has some excellent long-term drivers to its credit ready to add value to shares as we go on. Throw in the fact that Pentair has also worked to reduce its downside risk, and that represents a serious potential win ahead.
Making Appearances
This is all fine and well, but Pentair needs to keep up its appearances to maintain its credibility in the field and keep up its market share. After all, there are a lot of options when it comes to water treatment these days. But one move Pentair recently made may be a bigger help on that front than we give it credit for.
Pentair appeared at the J.P. Morgan Industrials Conference about two weeks ago, where its president and CEO, John Stauch, offered up a presentation. The presentation delivered key points about how Pentair puts materials to work to “…sustainably move, improve, and enjoy water.” Given that water really is one of those must-have items—you can only live about three days without it, after all—this may have been a big help after all.
Is Pentair a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on PNR stock based on seven Buys and four Holds assigned in the past three months, as indicated by the graphic below. After a 10.73% loss in its share price over the past year, the average PNR price target of $115.80 per share implies 26.85% upside potential.
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