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Pentair (PNR)
:PNR
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Pentair
(NYSE:PNR)
73Outperform
Positive Factors
Earnings
Pentair reported adjusted EPS of $1.08, which exceeded the estimate and consensus.
Financial Performance
The adoption of lean and 80/20 principles has led to an impressive 570bps EBITDA margin expansion, placing Pentair's margin comfortably in the upper half of the coverage.
Transformation Initiatives
Pentair guided to strong net productivity from transformation initiatives in 2025, which should compensate for the lack of volumes.
Negative Factors
Demand and Tariffs
Pentair assumes some demand destruction related to tariffs and is not able to recapture 100% of the price from tariffs.
Market Conditions
End markets are essentially in decline.
Residential and Commercial Recovery
There is a lack of visibility on residential and commercial recovery, and limited near-term upside to margin targets until volumes recover.
Pentair (PNR) vs. S&P 500 (SPY)
Market Cap
$13.45B
Dividend Yield1.15%
Average Volume (3M)1.67M
Price to Earnings (P/E)21.8
Beta (1Y)1.24
Revenue Growth-0.53%
EPS Growth0.13%
CountryUS
Employees9,750
SectorIndustrials
Sector Strength66
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)3.74
Shares Outstanding164,969,680
10 Day Avg. Volume1,549,076
30 Day Avg. Volume1,668,705
Financial Highlights & Ratios
PEG Ratio167.69
Price to Book (P/B)N/A
Price to Sales (P/S)3.53
Price to Cash Flow (P/CF)41.60
P/FCF Ratio24.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$114.80Price Target Upside40.79% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Pentair Business Overview & Revenue Model
Company DescriptionPentair plc provides various water solutions worldwide. It operates through Consumer Solutions; and Industrial & Flow Technologies segments. The Consumer Solutions segment designs, manufactures, and sells residential and commercial pool equipment and accessories, including pumps, filters, heaters, lights, automatic controls, automatic cleaners, maintenance equipment, and pool accessories for residential and commercial pool maintenance, repair, renovation, service, and construction applications; and water treatment products and systems comprising pressure tanks, control valves, activated carbon products, conventional filtration products, and point-of-entry and point-of-use systems for the use in residential whole home water filtration, drinking water filtration, and water softening solutions, as well as in commercial total water management and filtration in foodservice operations. It offers its products under the Everpure, Ken's Beverage, Kreepy Krauly, Pentair Water Solutions, Pleatco, RainSoft, and Sta-Rite brands. The Industrial & Flow Technologies segment manufactures and sells fluid treatment products, such as advanced membrane filtration products, separation systems, and membrane bioreactors; water supply and disposal, solid handling, fluid transfer, and turbine pumps; and valves, spray nozzles, process filtration systems, and gas recovery solutions for food and beverage, fluid separation technologies, water and wastewater treatment, water wells, pressure boosting, fire suppression, flood control, agricultural irrigation, crop spray, fluid circulation and transfer, fluid delivery, ion exchange, desalination, residential and municipal wells, and wastewater solids handling applications. It offers its products under the Pentair, Aurora, Berkeley, Codeline, Fairbanks-Nijhuis, Haffmans, Hydromatic, Hypro, Jung Pumpen, Myers, Sta-Rite, Shurflo, Südmo, and X-Flow brands. Pentair plc was founded in 1966 and is headquartered in London, the United Kingdom.
How the Company Makes MoneyPentair makes money primarily through the sale of its water treatment and filtration products, and flow management solutions. The company's revenue streams are diversified across residential, commercial, and industrial sectors, with a strong emphasis on delivering high-quality and efficient water systems. Key revenue drivers include sales of pool equipment, advanced filtration systems, and water flow technologies. Pentair also benefits from strategic partnerships and acquisitions that enhance its product portfolio and expand its market reach, contributing significantly to its earnings.
Pentair Financial Statement Overview
Summary
Pentair exhibits strong financial health across its income statement, balance sheet, and cash flow statement. The company maintains profitability, stable leverage, and solid cash flow generation. While revenue growth has been minimal, the company's operational efficiency and effective cash management support its financial stability and growth potential.Income Statement
Pentair has shown solid profitability with a stable gross profit margin and net profit margin over the years. The EBIT and EBITDA margins indicate strong operational efficiency. Revenue growth has been modest, with a slight decline in recent years. Overall, the income statement reflects a stable and profitable business.85
Very Positive
Balance Sheet
The balance sheet is healthy, with a moderate debt-to-equity ratio indicating balanced leverage. The company's equity ratio shows strong capitalization. Return on equity is impressive, suggesting effective use of equity to generate profits. However, the total debt has increased over the years, which could pose a risk if not managed well.78
Positive
Cash Flow
Pentair's cash flow statement reveals positive free cash flow growth and strong operating cash flow relative to net income. The free cash flow to net income ratio demonstrates effective cash management. Despite some fluctuations in investing cash flows, the overall cash flow position remains robust.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.08B | 4.10B | 4.12B | 3.76B | 3.02B | Gross Profit |
| 1.60B | 1.52B | 1.36B | 1.32B | 1.06B | EBIT |
| 803.80M | 739.20M | 595.30M | 636.90M | 461.40M | EBITDA |
| 803.80M | 852.00M | 830.40M | 714.40M | 527.60M | Net Income Common Stockholders |
| 625.40M | 622.70M | 480.90M | 553.00M | 358.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 118.70M | 170.30M | 108.90M | 94.50M | 82.10M | Total Assets |
| 6.45B | 6.56B | 6.45B | 4.75B | 4.20B | Total Debt |
| 1.65B | 2.09B | 2.35B | 894.10M | 839.60M | Net Debt |
| 1.53B | 1.92B | 2.24B | 799.60M | 757.50M | Total Liabilities |
| 2.88B | 3.35B | 3.74B | 2.33B | 2.09B | Stockholders Equity |
| 3.56B | 3.22B | 2.71B | 2.42B | 2.11B |
| Cash Flow | Free Cash Flow | |||
| 692.30M | 543.20M | 278.10M | 553.00M | 511.40M | Operating Cash Flow |
| 766.70M | 619.20M | 363.30M | 613.20M | 573.60M | Investing Cash Flow |
| -187.60M | -85.40M | -1.58B | -390.70M | -117.90M | Financing Cash Flow |
| -636.70M | -468.10M | 1.23B | -222.20M | -435.90M |
Pentair Technical Analysis
Negative
81.54
Price Trends
93.29
Negative
98.72
Negative
93.28
Negative
Market Momentum
-1.39
Negative
43.90
Neutral
30.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PNR, the sentiment is Negative. The current price of 81.54 is below the 20-day moving average (MA) of 87.40, below the 50-day MA of 93.29, and below the 200-day MA of 93.28, indicating a bearish trend. The MACD of -1.39 indicates Negative momentum. The RSI at 43.90 is Neutral, neither overbought nor oversold. The STOCH value of 30.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PNR.
Pentair Risk Analysis
Pentair disclosed 37 risk factors in its most recent earnings report. Pentair reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Pentair Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $6.87B | 23.72 | 18.08% | 0.88% | 9.53% | 10.98% | |
74 Outperform | $27.01B | 30.37 | 8.55% | 1.33% | 16.23% | 34.42% | |
73 Outperform | $13.45B | 21.79 | 18.45% | 1.15% | -0.53% | 0.13% | |
67 Neutral | $12.74B | 25.35 | 13.77% | 1.64% | -0.16% | -15.42% | |
65 Neutral | $141.59B | 37.42 | 7.57% | 0.57% | -13.50% | -17.25% | |
63 Neutral | $9.14B | 17.55 | 28.63% | 2.07% | -0.90% | -1.69% | |
62 Neutral | $8.08B | 13.63 | 3.82% | 3.13% | 3.58% | -14.35% |
* Industrials Sector Average
Performance Comparison
PNR
Pentair
81.54
-0.39
-0.48%
DHR
Danaher
197.90
-42.86
-17.80%
IEX
IDEX
168.68
-65.06
-27.83%
AOS
A. O. Smith Corporation
63.66
-22.00
-25.68%
WTS
Watts Water Technologies
195.44
-7.50
-3.70%
XYL
Xylem
110.99
-14.85
-11.80%
Pentair Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -20.55% | Next Earnings Date: Apr 17, 2025
Earnings Call Sentiment Positive
Pentair delivered a strong performance in 2024 with record profitability and cash flow, driven by significant margin expansion and successful Transformation initiatives. However, the company faced challenges with sales declines in certain segments due to higher interest rates and FX headwinds. The guidance for 2025 remains cautiously optimistic, with expectations for continued margin expansion and EPS growth despite ongoing macroeconomic uncertainties.Highlights
Record Profitability and Cash Flow
Pentair achieved record profitability and cash flow for 2024, with a record adjusted operating income of $959 million, up 12%, and record free cash flow of $693 million, up nearly 26% year-over-year.
Triple-Digit Margin Expansion
Pentair posted triple-digit margin expansion across Flow, Water Solutions, and Pool segments, achieving record Return on Sales (ROS) for all three segments.
Dividend Increase
Pentair increased its dividend by approximately 9% for 2025, marking the 49th consecutive year of dividend increases.
Strong Performance in Pool Segment
Pool sales increased 7% for the year, driven by price and volume, with a new annual ROS record of 33.2%.
Positive Impact from Transformation Initiatives
Pentair's Transformation initiatives delivered over $100 million in productivity savings, net of investments, in 2024 and are expected to deliver $80 million in 2025.
Lowlights
Sales Decline in Flow and Water Solutions
Flow and Water Solutions segments experienced a sales decline of 4% each, attributed to lower residential and industrial sales and a decline in the commercial ice segment.
Impact of Higher Interest Rates
Pentair's residential businesses continue to be impacted by higher interest rates, affecting sales across various segments.
FX Headwinds
Sales were negatively impacted by foreign exchange headwinds, contributing to a 1% decline in fourth-quarter sales.
Company Guidance
During the Pentair Fourth Quarter 2024 earnings call, the company provided guidance for 2025, including an adjusted EPS range of $4.65 to $4.80, reflecting a 7% to 11% increase year-over-year. Sales for 2025 are expected to be flat to up 2%, with specific segment guidance indicating Flow sales up slightly, Water Solutions flat to down low-single-digits, and Pool sales up 4% to 5%. Pentair anticipates a 125 basis point expansion in return on sales (ROS) to approximately 24.5% to 25%, driven by $80 million in productivity savings from Transformation and 80/20 initiatives. Additionally, they are factoring in the impact of China tariffs and have prepared for potential tariffs from Canada and Mexico within their guidance. The company also announced a 9% dividend increase for 2025, marking the 49th consecutive year of dividend growth.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.