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Will Q4 Earnings Hold a Surprise for Pentair (PNR) Stock?
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Pentair plc (PNR - Free Report) is expected to report fourth-quarter 2016 results on Jan 31. Last quarter, the company posted a positive earnings surprise of 6.85%. Pentair has beaten estimates in each of the trailing four quarters, with an average positive earnings surprise of 5.49%. Let’s see how things are shaping up for this announcement.
Key Factors in the Quarter
For the fourth quarter, Pentair expects EPS at around 73 cents, highlighting a decline of approximately 17% year over year on an adjusted basis. Revenues are projected at roughly $1.22 billion, down both 6% on a reported basis as well as core basis compared to fourth-quarter 2015 revenues. The guidance reflects the ongoing sluggish industrial environment.
Pentair expects Water Quality Systems sales to grow approximately 2% while Flow & Filtration Solutions is likely to decline 9% primarily related to lower project spending in the food and beverage space during the quarter.
Further, Technical Solutions revenues are expected to decline approximately 10% primarily due to the completion of the previously mentioned large Canadian projects and mid-teens declines in year-over-year MRO spending within energy. Pentair thus projects approximately 10% decline in the segment’s income in the fourth quarter.
Share Price Performance
In the last one year, Pentair has underperformed the Zacks classified Machinery-Thermal Products sub-industry with respect to price performance. The stock gained 38.2%, while the industry rose 46.1% over the same time frame.
Earnings Whispers
Our proven model does not conclusively show that Pentair is likely to beat earnings this quarter as it lacks the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: The Earnings ESP for Pentair is 0.00%. This is because the Most Accurate estimate of 73 cents is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Pentair currently carries Zacks Rank #3. Although this increases the predictive power of ESP, the company’s 0.00% ESP makes an earnings prediction uncertain.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Alcoa Corporation (AA - Free Report) has an Earnings ESP of +4.55% and a Zacks Rank #3.
AGCO Corporation (AGCO - Free Report) has an Earnings ESP of +5.63% and a Zacks Rank #3.
Zacks' Top Investment Ideas for Long-Term Profit
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Will Q4 Earnings Hold a Surprise for Pentair (PNR) Stock?
Pentair plc (PNR - Free Report) is expected to report fourth-quarter 2016 results on Jan 31. Last quarter, the company posted a positive earnings surprise of 6.85%. Pentair has beaten estimates in each of the trailing four quarters, with an average positive earnings surprise of 5.49%. Let’s see how things are shaping up for this announcement.
Key Factors in the Quarter
For the fourth quarter, Pentair expects EPS at around 73 cents, highlighting a decline of approximately 17% year over year on an adjusted basis. Revenues are projected at roughly $1.22 billion, down both 6% on a reported basis as well as core basis compared to fourth-quarter 2015 revenues. The guidance reflects the ongoing sluggish industrial environment.
Pentair expects Water Quality Systems sales to grow approximately 2% while Flow & Filtration Solutions is likely to decline 9% primarily related to lower project spending in the food and beverage space during the quarter.
Pentair PLC. Price and Consensus
Pentair PLC. Price and Consensus | Pentair PLC. Quote
Further, Technical Solutions revenues are expected to decline approximately 10% primarily due to the completion of the previously mentioned large Canadian projects and mid-teens declines in year-over-year MRO spending within energy. Pentair thus projects approximately 10% decline in the segment’s income in the fourth quarter.
Share Price Performance
In the last one year, Pentair has underperformed the Zacks classified Machinery-Thermal Products sub-industry with respect to price performance. The stock gained 38.2%, while the industry rose 46.1% over the same time frame.
Earnings Whispers
Our proven model does not conclusively show that Pentair is likely to beat earnings this quarter as it lacks the key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Zacks ESP: The Earnings ESP for Pentair is 0.00%. This is because the Most Accurate estimate of 73 cents is in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Pentair currently carries Zacks Rank #3. Although this increases the predictive power of ESP, the company’s 0.00% ESP makes an earnings prediction uncertain.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Methanex Corporation (MEOH - Free Report) has a positive Earnings ESP of +53.33% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Alcoa Corporation (AA - Free Report) has an Earnings ESP of +4.55% and a Zacks Rank #3.
AGCO Corporation (AGCO - Free Report) has an Earnings ESP of +5.63% and a Zacks Rank #3.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>