Group 1 - Pentair plc (PNR) has shown strong year-to-date performance, with a gain of approximately 30.7%, outperforming the average gain of 13.9% in the Industrial Products sector [4] - The Zacks Rank for Pentair plc is currently 2 (Buy), indicating a favorable outlook based on earnings estimate revisions and improving earnings outlooks [3][4] - The Zacks Consensus Estimate for Pentair's full-year earnings has increased by 0.9% over the past 90 days, reflecting stronger analyst sentiment [4] Group 2 - Pentair plc belongs to the Manufacturing - Thermal Products industry, which is ranked 8 in the Zacks Industry Rank, with stocks in this group gaining about 29.5% year-to-date [6] - Another stock in the Industrial Products sector, Schneider Electric SE (SBGSY), has also outperformed, with a year-to-date increase of 29.5% and a Zacks Rank of 2 (Buy) [5][6] - The Manufacturing - Electronics industry, to which Schneider Electric belongs, is ranked 29 and has seen a gain of 16.8% this year [6]

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Core Viewpoint - Pentair plc has shown strong stock performance, with a 10.7% increase over the past month and a 32% gain since the beginning of the year, outperforming both the Zacks Industrial Products sector and the Zacks Manufacturing - Thermal Products industry [1][2]. Financial Performance - Pentair has consistently exceeded earnings expectations, reporting EPS of $1.22 against a consensus estimate of $1.15 in its last earnings report [2]. - For the current fiscal year, Pentair is projected to achieve earnings of $4.25 per share on revenues of $4.1 billion, reflecting a 13.33% increase in EPS and a slight decrease of 0.12% in revenues [3]. - The forecast for the next fiscal year indicates earnings of $4.82 per share on $4.25 billion in revenues, representing year-over-year changes of 13.24% and 3.64%, respectively [3]. Valuation Metrics - Pentair's current valuation metrics show a trading multiple of 22.6X current fiscal year EPS estimates, aligning with the peer industry average [7]. - The stock trades at 21.5X trailing cash flow, compared to a peer group average of 17.1X, and has a PEG ratio of 1.73, indicating it is not among the top value stocks [7]. Zacks Rank and Style Scores - Pentair holds a Zacks Rank of 2 (Buy), supported by favorable earnings estimate revisions from analysts [8]. - The stock has a Value Score of C, a Growth Score of A, and a Momentum Score of D, resulting in a combined VGM Score of B [6][8].

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For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both. Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor. Zacks Premium includes access to the Zacks Style Scores as well. What are the Zacks Style Scores? T ...

It has been about a month since the last earnings report for Pentair plc (PNR) . Shares have added about 1.2% in that time frame, underperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Pentair due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Pentair Earnings & Sales Beat Estimates in Q2, Ri ...

A relatively low risk that's improving profit margins and can outperform in a housing market recovery. There are plenty of stocks to buy with upside exposure to falling interest rates, and there is also no lack of stocks whose management is restructuring the company for revenue and margin expansion. Still, what about buying shares in a company whose restructuring initiatives make it look like a good value and have an upside kicker from a lower-interest-rate environment? That's the proposition at the water s ...

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Investment Thesis - The company reported Q2 2024 earnings with a rebound in the Pool segment, which saw a 17.1% Y/Y sales increase, while the Flow and Water Solutions segments experienced declines [1][2] - The overall revenue growth guidance for the year has been reduced from 2-3% to a range of flat to a 1% decline due to high interest rates affecting sales [2] - The company has successfully de-levered its balance sheet from ~2.6x to 1.6x, positioning itself for potential bolt-on M&As [3] Revenue Analysis and Outlook - In Q2 2024, consolidated sales increased by 1.6% Y/Y to $1.099 billion, with organic growth of 2.2% [1][23] - The Pool segment's strong growth was attributed to easier Y/Y comparisons and pricing increases, while the Water Solutions segment faced a 7.6% Y/Y decline due to tough comparisons and high interest rates impacting demand [1][2] - The Flow segment saw a 3.6% Y/Y decline, primarily due to a 10% Y/Y drop in residential flow sales [1] Margin Analysis and Outlook - The company's adjusted operating margin expanded by 310 bps Y/Y to 24.7% in Q2 2024, benefiting from price increases and productivity gains [4][25] - Management anticipates continued pricing increases above inflation, which should support margin growth moving forward [10][13] Valuations and Conclusion - The company is currently trading at 17.97x FY 25 consensus EPS estimates of $4.79, in line with its 5-year average forward P/E of 17.80x [8] - There is potential for upward revisions in EPS estimates due to ongoing cost-saving initiatives, with a target of $100 million in cost reductions for the current year [10][29] - The company is expected to achieve double-digit EPS growth in the coming years, driven by revenue growth and margin expansion [22][29]

Sales growth certainly matters for industrial companies, but over time there has been a closer correlation between margins (and margin-driven metrics like ROIC) and multiples than growth and multiples for industrials. That's a meaningful positive for Pentair (NYSE:PNR), as this leading player in water-related systems continues to excel on the margin side. Pentair shares are up about 45% since my last update, not only outperforming the industrial space, but outperforming many pool equipment (Hayward (HAYW)) ...