We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Pentair (PNR) Stock Up 20% in 3 Months: What's Driving It?
Read MoreHide Full Article
Pentair plc (PNR - Free Report) shares have gained 19.9% over the past three months, outperforming its industry’s growth of 17.6%. Moreover, it has topped the S&P 500’s rally of 13.1% over the same period.
Let’s take a look into the factors behind this Zacks Rank #3 (Hold) stock’s price appreciation.
Image Source: Zacks Investment Research
What’s Aiding Pentair?
Q2 Earnings Performance: Pentair reported second-quarter 2021 adjusted earnings per share of 84 cents, which improved 42% year over year driven by strong order levels.
Upbeat 2021 View: Backed by the trend in orders and record backlog, Pentair expects earnings per share in 2021 between $3.30 and $3.40. The mid-point of the range indicates year-over-year growth of 34%.
Solid Demand: Pentair’s pool business has been benefiting from increased demand for swimming pools as consumers were forced to stay at home amid the pandemic, which triggered the desire to invest in their backyards. Demand for new pools remains robust even this year as consumers are continuing to enhance their at-home quality of life by investing in pools. Demand for pool maintenance also remains strong. Considering that nearly 80% of Pentair’s Consumer Solutions segment serves residential markets, the ongoing momentum bodes well. The Industrial & Flow Technologies segment is performing well, backed by recovery in commercial and industrial businesses.
Expected Benefits from Transformation Program: During second-quarter 2021, Pentair launched a Transformation program to accelerate growth and drive margin expansion. The program is structured in multiple phases and is expected to drive operational efficiency, streamline processes, reduce complexity while meeting financial objectives. The company is targeting at least 300 basis points of margin expansion by 2025 through the program.
Focus on Innovation: Pentair is focused on expanding digital transformation, innovation, technology and brand building. The company has a strong product pipeline for 2021. In Water Treatment business, it is investing in innovative components, such as flat connected valve for water softeners. The company continues to invest in new areas around commercial office water and total water management within its commercial systems business.
Acquisitions to Drive Growth: Pentair is focused on expanding particularly in the areas of pool and residential and commercial water treatment through acquisitions. The company has recently entered into an agreement to buy Pleatco for $255 million in cash, in an effort to expand its footprint in the aftermarket water and air filtration space. Earlier it had completed the acquisitions of Aquion, Inc. and Pelican Water Systems, Rocean and Ken’s Beverage to expand its capabilities.
Earnings estimates for Pentair have also been witnessing upward revisions over the past three months. Over the said time period, the Zacks Consensus Estimate for both 2021 and 2022 have increased 7%.
Image: Bigstock
Pentair (PNR) Stock Up 20% in 3 Months: What's Driving It?
Pentair plc (PNR - Free Report) shares have gained 19.9% over the past three months, outperforming its industry’s growth of 17.6%. Moreover, it has topped the S&P 500’s rally of 13.1% over the same period.
Let’s take a look into the factors behind this Zacks Rank #3 (Hold) stock’s price appreciation.
What’s Aiding Pentair?
Q2 Earnings Performance: Pentair reported second-quarter 2021 adjusted earnings per share of 84 cents, which improved 42% year over year driven by strong order levels.
Upbeat 2021 View: Backed by the trend in orders and record backlog, Pentair expects earnings per share in 2021 between $3.30 and $3.40. The mid-point of the range indicates year-over-year growth of 34%.
Solid Demand: Pentair’s pool business has been benefiting from increased demand for swimming pools as consumers were forced to stay at home amid the pandemic, which triggered the desire to invest in their backyards. Demand for new pools remains robust even this year as consumers are continuing to enhance their at-home quality of life by investing in pools. Demand for pool maintenance also remains strong. Considering that nearly 80% of Pentair’s Consumer Solutions segment serves residential markets, the ongoing momentum bodes well. The Industrial & Flow Technologies segment is performing well, backed by recovery in commercial and industrial businesses.
Expected Benefits from Transformation Program: During second-quarter 2021, Pentair launched a Transformation program to accelerate growth and drive margin expansion. The program is structured in multiple phases and is expected to drive operational efficiency, streamline processes, reduce complexity while meeting financial objectives. The company is targeting at least 300 basis points of margin expansion by 2025 through the program.
Focus on Innovation: Pentair is focused on expanding digital transformation, innovation, technology and brand building. The company has a strong product pipeline for 2021. In Water Treatment business, it is investing in innovative components, such as flat connected valve for water softeners. The company continues to invest in new areas around commercial office water and total water management within its commercial systems business.
Acquisitions to Drive Growth: Pentair is focused on expanding particularly in the areas of pool and residential and commercial water treatment through acquisitions. The company has recently entered into an agreement to buy Pleatco for $255 million in cash, in an effort to expand its footprint in the aftermarket water and air filtration space. Earlier it had completed the acquisitions of Aquion, Inc. and Pelican Water Systems, Rocean and Ken’s Beverage to expand its capabilities.
Earnings estimates for Pentair have also been witnessing upward revisions over the past three months. Over the said time period, the Zacks Consensus Estimate for both 2021 and 2022 have increased 7%.
Stocks to Consider
Some better-ranked stocks in the Industrial Products sector are Belden Inc. (BDC - Free Report) , Kadant Inc. (KAI - Free Report) and Alcoa Corporation (AA - Free Report) , all of which sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Belden has an estimated earnings growth rate of 63.6% for the current fiscal. The company’s shares have risen 20% in the past three months.
Kadant has a projected earnings growth rate of 48.2% for fiscal 2021. In the past three months, the company’s shares have gained 21%.
Alcoa has an estimated earnings growth rate of 601.7% for the current fiscal. The company’s shares have appreciated 36% over the past three months.