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Pentair (PNR)
NYSE:PNR
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Pentair
(NYSE:PNR)
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Rating:68Neutral
Price Target:
$103.00
▲(4.97% Upside)
Action:ReiteratedDate:02/04/26
The score is supported most by solid financial performance (margin expansion, strong free cash flow, and improving leverage) and constructive 2026 guidance with ongoing margin gains. It is held back by weak technicals (below major moving averages with negative MACD) and a relatively rich valuation (P/E 26.64) with only a modest dividend yield.
Positive Factors
Margin Expansion
Pentair has delivered sustained margin expansion across multiple years, culminating in a 25.2% ROS in 2025 and 15 consecutive quarters of margin improvement. Durable margin gains reflect pricing, mix, and operating leverage that support persistent cash generation and resilience to moderate top-line softness.
Cash Generation & Capital Allocation
Strong free cash flow provides durable financial flexibility: supports buybacks, debt reduction and reinvestment. Consistent FCF (target ~100% of net income) underpins capital returns and funds transformation initiatives without relying on external financing, sustaining long-term balance-sheet optionality.
Product & Segment Strength
New product introductions and industry awards in Pool and water treatment bolster technological differentiation and channel momentum. Durable product innovation improves customer retention, supports premium pricing, and helps expand share where the company shows strong segment-level profitability and margins.
Negative Factors
Water Solutions Weakness
A core end-market showing multi-quarter declines creates a structural headwind to diversified revenue growth. Prolonged weakness in Water Solutions can limit overall company top-line recovery, reduce segment operating leverage, and pressure the company to rely more heavily on other segments to meet growth targets.
Tariffs and Commodity Cost Pressure
Sustained tariff and metal inflation exposures are structural cost risks that can erode margins if not offset by pricing or sourcing changes. Recurring incremental costs introduce uncertainty into long-term margin sustainability and force repeated pricing or margin tradeoffs across industrial and pool product lines.
Volume Uncertainty & Reliance on Transformation Savings
Management's margin and EPS targets rely materially on transformation savings that assume at least stable volumes. If volumes remain soft, expected operating-leverage and savings may under-deliver, making margin guidance and FCF targets harder to sustain over the medium term.
Pentair (PNR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$16.02B
Dividend Yield0.96%
Average Volume (3M)1.85M
Price to Earnings (P/E)25.1
Beta (1Y)1.07
Revenue Growth0.83%
EPS Growth-1.32%
CountryUS
Employees9,750
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.18
Shares Outstanding163,235,700
10 Day Avg. Volume1,376,459
30 Day Avg. Volume1,850,912
Financial Highlights & Ratios
PEG Ratio4.70
Price to Book (P/B)4.42
Price to Sales (P/S)4.09
P/FCF Ratio22.91
Enterprise Value/Market Cap1.09
Enterprise Value/Revenue4.19
Enterprise Value/Gross Profit10.36
Enterprise Value/Ebitda18.56
Forecast
1Y Price Target
$118.23Price Target Upside20.50% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
EPS Forecast (FY)5.33
Revenue Forecast (FY)$4.31B
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 generates revenue through multiple key streams, primarily from the sale of water treatment and filtration products, which serve both residential and commercial markets. The company also earns income from its pool and spa equipment, including pumps and heaters, which are essential for recreational water management. Additionally, Pentair's industrial segment provides specialized water solutions, including process water treatment and wastewater management, contributing significantly to its earnings. Strategic partnerships with distributors and OEMs enhance their market reach and sales channels, while ongoing investments in innovation and sustainability initiatives further bolster revenue by catering to the growing demand for eco-friendly water solutions.
Pentair Earnings Call Summary
Earnings Call Date:Feb 03, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 28, 2026
Earnings Call Sentiment Positive
The call emphasized multiple material operational and financial accomplishments—record annual revenues, record adjusted EPS, robust free cash flow, sustained margin expansion (15 consecutive quarters), and strong segment performance in Flow and Pool—along with clear 2026 guidance showing growth in sales, earnings, and ROS expansion. Counterbalancing items included weakness in Water Solutions (quarterly and annual sales declines), tariff and metal inflation pressures (incremental ~$30M tariff headwind in 2026), reliance on transformation savings that partially depend on volume recovery, and a conservative outlook that assumes no residential recovery. On balance, the positive operational execution, record cash generation, strong capital returns, and upward guidance meaningfully outweigh the highlighted near-term headwinds and conservatism in demand assumptions.Q4-2025 Updates
Positive Updates
Strong Q4 Financial Performance and Margin Expansion
Q4 sales grew 5%; adjusted operating income increased 9% to $252 million; return on sales expanded 90 basis points to 24.7%; adjusted EPS rose 9% to $1.18; fifteenth consecutive quarter of margin expansion.
Record Full-Year Results
Fiscal 2025 delivered record annual sales of $4.18 billion (up 2%), record adjusted operating income (up 10%), record return on sales at 25.2% (up 170 bps), and record adjusted EPS of $4.92 (up 14%).
Flow Segment Outperformance
Q4 flow sales rose 9% to $394 million (core flow +4%); commercial and industrial +12% YoY; reportable segment income up 22% and ROS increased 240 bps to 22.8%; full-year flow sales up 3% to $1.55 billion with reportable segment income +14% and ROS +230 bps to 23.3% (record).
Pool Segment Strength and New Product Recognition
Q4 pool sales grew 11% to $393 million and reportable segment income increased 11%; full-year pool sales +9% with ROS rising 60 bps to 33.8% (record). Notable product launches (e.g., Manitowoc ICE Neo, IntelliVibe, IntelliCore Plus, Everpure PFAS filtration) and industry recognition (Kitchen Innovation Award).
Record Free Cash Flow and Shareholder Returns
Generated record free cash flow of $748 million in 2025; repurchased 2.3 million shares for $225 million and announced new buyback authorization up to $1 billion; maintained a healthy leverage ratio (~1.4x) and ROIC of 16.7% (up from 15.5%).
Clear 2026 Guidance Demonstrating Confidence
2026 adjusted EPS guidance of $5.25–$5.40 (midpoint ~8% increase), total sales growth guide of ~3–4%, adjusted operating income growth of ~5–8%, and anticipated ROS expansion of ~100 bps to ~26%; price expected to be up ~2–3%, volume roughly flat, and ~$70 million of transformation savings net of investments targeted.
Strategic Organizational Realignment
Combined residential flow with residential water solutions (representing ~25% of factories) to create scale, channel synergies and potential margin improvements; management changes positioned to accelerate customer-focused growth, digital/AI, and innovation efforts.
Negative Updates
Water Solutions Near-Term Weakness
Q4 Water Solutions sales declined 10% to $232 million; reportable segment income fell 12% to $55 million and ROS decreased 60 bps to 23.5% due to FX and volume declines. Full-year water solutions sales down 6% (reportable segment income flat despite FY ROS improvement).
Tariffs and Incremental Cost Headwinds
Tariff-related headwind estimated at ~$70 million in 2025 with an incremental ~$30 million expected in 2026 (primarily in Q1); metal inflation (notably certain metals in pool) caused higher-than-expected cost pressure in Q4 and may require pricing or mitigation if persistent.
Volume Uncertainty and Conservative Demand Assumptions
2026 guide assumes roughly flat full-year volume and explicitly excludes a residential recovery (no upside assumed), with Q1 volumes modest and second-half volume improvement expected to drive flat full-year volumes—introduces demand risk if market recovery lags or changes unfavorably.
Near-Term Segment Guidance Pressures
Q1 2026 guidance: total sales +1–2%, flow high-single-digit growth, water solutions down low-single-digits (core roughly flat), pool approximately flat—signaling near-term softness in water solutions and a cautious view on pool/residential recovery.
Transformation Execution Dependence on Volume Recovery
Management noted sourcing and pricing outperformance but underperformance on factory volume leverage versus original expectations; some transformation savings rely on future volume recovery to fully realize operational efficiency gains.
International/China Volatility
Management highlighted international and China sales volatility affecting parts of the business (notably commercial water segments), with uneven recovery and prior China headwinds only mitigated in the back half of 2025.
Company Guidance
Pentair's 2026 guidance calls for adjusted EPS of $5.25–$5.40 (≈+7–10% y/y, +8% at the midpoint) and total sales up ≈3–4%, with adjusted operating income up ≈5–8% and return on sales expanding roughly 100 bps to ~26%; they expect full-year volume to be roughly flat, price to be up ~2–3%, and FX/acquisitions/divestitures to contribute ~50 bps, with ~ $70M of transformation savings net of investments. By segment, Flow sales are expected to rise mid- to high-single-digits (with ROS improving in line with company expansion), Water Solutions roughly flat (core +low-single-digits), and Pool ≈+3% (modest ROS improvement). Q1 2026 guidance: sales +1–2% (Flow high-single-digits, Water Solutions down low-single-digits with core flat, Pool ~flat), Q1 adjusted operating income +2–5%, and Q1 adjusted EPS $1.15–$1.18 (~+4–6%, ~22% of full-year EPS). Other planning assumptions include corporate expenses ≈$90M, interest ≈$67M, an adjusted tax rate ≈17%, ~165M share count, incremental tariffs of ≈$30M in 2026 (primarily Q1) versus ~$70M in 2025, and a target for free cash flow of roughly 100% of net income while maintaining balanced capital allocation.Pentair Financial Statement Overview
Summary
Strong multi-year profitability improvement (gross margin ~35% to ~40%; net margin up to ~15.7%) and solid free cash flow generation (~$746M in 2025) with improving leverage (debt-to-equity down to ~0.42). Offsets include mostly flat recent revenue growth and some cash-flow volatility, plus limited confidence in 2025 balance-sheet efficiency due to ROE shown as 0.0.Income Statement
Revenue has grown over the long term (from $3.0B in 2020 to $4.18B in 2025), though the last few years show mostly flat top-line performance with a modest uptick in 2025. Profitability has steadily improved: gross margin expanded meaningfully (about 35% in 2020 to ~40% in 2025) and net margin rose to ~15.7% in 2025 (vs. ~11.9% in 2020). Operating profitability is also stronger, with EBIT margin near ~19.8% in 2024–2025. Main drawback is the uneven revenue trajectory and limited recent growth, despite solid margin execution.82
Very Positive
Balance Sheet
Leverage looks manageable and has improved versus the 2022–2023 peak: debt-to-equity declined from ~0.87 (2022) and ~0.65 (2023) to ~0.42 in 2025, supported by rising equity ($2.42B in 2021 to $3.87B in 2025). Total assets are higher versus 2020, indicating a larger operating base. A key gap is that 2025 return on equity is shown as 0.0, which limits confidence in assessing current-period balance-sheet efficiency from the provided data.74
Positive
Cash Flow
Cash generation is strong in absolute terms: operating cash flow rose to ~$815M and free cash flow to ~$746M in 2025, both well above 2022 levels. Free cash flow has generally tracked net income well (free cash flow running at ~0.77x–0.92x of net income across the period), supporting earnings quality. However, cash flow has been somewhat volatile (notably weak 2022 operating cash flow and a 2025 free-cash-flow decline vs. 2024), which is a watch item despite the overall improvement.78
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.18B | 4.08B | 4.10B | 4.12B | 3.76B |
| Gross Profit | 1.69B | 1.60B | 1.52B | 1.36B | 1.32B |
| EBITDA | 943.60M | 922.10M | 852.00M | 719.00M | 716.80M |
| Net Income | 653.80M | 625.40M | 622.70M | 480.90M | 553.00M |
Balance Sheet | |||||
| Total Assets | 6.87B | 6.45B | 6.56B | 6.45B | 4.75B |
| Cash, Cash Equivalents and Short-Term Investments | 101.60M | 118.70M | 170.30M | 108.90M | 94.50M |
| Total Debt | 1.64B | 1.77B | 2.09B | 2.40B | 982.30M |
| Total Liabilities | 3.00B | 2.88B | 3.35B | 3.74B | 2.33B |
| Stockholders Equity | 3.87B | 3.56B | 3.22B | 2.71B | 2.42B |
Cash Flow | |||||
| Free Cash Flow | 746.00M | 692.30M | 543.20M | 278.10M | 553.00M |
| Operating Cash Flow | 814.80M | 766.70M | 619.20M | 363.30M | 613.20M |
| Investing Cash Flow | -404.50M | -187.60M | -85.40M | -1.58B | -390.70M |
| Financing Cash Flow | -402.50M | -636.70M | -468.10M | 1.23B | -222.20M |
Pentair Technical Analysis
Negative
98.12
Price Trends
102.80
Negative
104.62
Negative
104.29
Negative
Market Momentum
-0.84
Positive
41.73
Neutral
21.76
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 98.12 is below the 20-day moving average (MA) of 99.75, below the 50-day MA of 102.80, and below the 200-day MA of 104.29, indicating a bearish trend. The MACD of -0.84 indicates Positive momentum. The RSI at 41.73 is Neutral, neither overbought nor oversold. The STOCH value of 21.76 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $15.68B | 30.46 | 19.92% | 1.32% | 2.85% | 3.09% | |
80 Outperform | $10.86B | 32.31 | 18.25% | 0.70% | 4.18% | 16.05% | |
68 Neutral | $16.02B | 25.11 | 17.48% | 0.96% | 0.83% | -1.32% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $14.77B | 52.66 | 4.27% | 0.97% | -4.99% | 22.16% | |
60 Neutral | $13.52B | 85.73 | 6.22% | ― | 5.52% | 9.03% | |
60 Neutral | $8.31B | -28.79 | -6.20% | ― | 0.27% | -159.24% |
* Industrials Sector Average
PNR
Pentair
97.57
8.81
9.93%
GNRC
Generac Holdings
221.21
93.49
73.20%
GGG
Graco
92.45
10.22
12.42%
RRX
Regal Rexnord
214.85
95.77
80.43%
MIDD
The Middleby
162.13
3.09
1.94%
WTS
Watts Water Technologies
320.87
117.79
58.00%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.