Here Are the Facts You Need to Understand Pentair (PNR)

Now trading at a price of $53.81, Pentair has moved -2.4% so far today. In contrast, the S&P 500 index moved -1.0%. Read below for a basic value analysis of Pentair.

Pentair shares moved 4.4% over the last 52 weeks, with a high of $60.85 and a low of $38.55. During this time, the stock outperformed the S&P 500 index by 12.0%. As of January 2022, the company's 50-day average price is $54.0. Pentair plc provides various water solutions worldwide. The mid-cap Industrials company has 11,250 full time employees and is based in London, United Kingdom. Pentair has returned a 1.5% dividend yield over the last 12 months.

EPS Trend Sustained Primarily by Reducing the Number of Shares Outstanding with a Highly Leveraged Balance Sheet:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $2,957 $3,018 $3,765 $4,122
Revenue Growth n/a 2.05% 24.75% 9.48%
Gross Margins 35.6% 35.0% 35.0% 33.1%
Gross Margins Growth n/a -1.69% 0.0% -5.43%
Operating Margins 14.6% 15.3% 16.9% 14.4%
Operating Margins Growth n/a 4.79% 10.46% -14.79%
Net Margins 12.03% 11.88% 14.69% 11.67%
Net Margins Growth n/a -1.25% 23.65% -20.56%
Earnings Per Share $2.09 $2.14 $3.3 $2.92
EPS Growth n/a 2.39% 54.21% -11.52%
Diluted Shares (MM) 170 167 168 165
Free Cash Flow (MM) $294 $511 $553 $278
FCF Growth n/a 73.65% 8.13% -49.71%
Capital Expenditures (MM) -$58 -$62 -$60 -$85
Net Debt / EBITDA 1.84 1.43 1.12 3.07

Pentair Is Too Expensive at Current Levels:

Compared to the Industrials sector's average of 20.49, Pentair has a trailing twelve month P/E ratio of 18.4 and, according to its EPS guidance of 3.99, an expected P/E ratio of 13.5. Pentair's PEG ratio is 0.91 based on its 13.8% compound average growth rate of historical and projected earnings per share. This suggests that company's shares are undervalued.

Furthermore, Pentair is likely undervalued in terms of its equity because its P/B ratio is 3.3 compared to its sector average of 3.78. The company's shares are currently trading 73.1% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 2.61 * 16.458) = $31.09

Pentair Is the Subject of Mixed Market Indicators:

15 analysts are following Pentair and have set target prices ranging from $39.0 to $75.0 per share. On average, they have given the company a rating of buy. At the current price of $53.81, PNR is trading -9.52% away from its average analyst target price of $59.47 per share, implying an analyst consensus of some upside potential for the stock.

The company has an average amount of shares sold short since 5.1% of the company's shares are tied to short positions. Institutions own 95.7% of Pentair's shares, while the insider ownership rate stands at 0.42%. The biggest shareholder is the Vanguard Group, Inc. with a 12% stake in the company worth approximately $1,052,200,659.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.