Pentair's Structural Margin Enhancements Undervalued, Analyst Sees Positive Momentum In Pool Business

KeyBanc analyst Jeffrey Hammond upgraded the shares of Pentair Plc PNR from Sector Weight to Overweight with a price target of $82.

The analyst says investors' concerns about Pentair's Pool segment are overdone and sees an attractive setup for the business moving forward in 2024.

The absence of de-stocking provides meaningful tailwinds, writes the analyst.

While the analyst says most of the recent improvement is from price/cost and Manitowoc, the analyst is also impressed by the degree of recent margin expansion, after a period of slow margin expansion.

The analyst sees upside from self-help tailwinds from the ongoing transformation program with strategic pricing, sourcing and improving mix.

The ongoing structural margin enhancement well-ahead of historical trends is underappreciated at these levels, writes the analyst.

The analyst says the price target reflects the structural margin improvements and the reaccelerating momentum in the Pool segment.

Price Action: PNR shares are trading lower by 0.76% at $66.84 on the last check Wednesday.

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