Pentair PLC (PNR) Now Covered by Credit Suisse Group AG
Investment analysts at Credit Suisse Group AG assumed coverage on shares of Pentair PLC (NYSE:PNR) in a research report issued on Monday. The brokerage set a “neutral” rating and a $66.00 price target on the stock. Credit Suisse Group AG’s price target points to a potential upside of 7.39% from the company’s current price.
The analysts wrote, “Given signs of a bottoming in the latter, and PNR’s late-cycle sales mix, we think this out-growth is unlikely to accelerate. While its markets are strong now, we note that PNR’s cyclicality was no lower than the sector average during the 2009 downturn,” analyst Julian Mitchell wrote in a note. That said, Mitchell noted that the company should continue to record strong margin growth, while its operating margins have increased by about 300bps over the past three years.Related Link: Cowen & Company Downgrades Pentair To Underperform”We view five business units (-30 percent of sales) as ‘under-earning’ today, in that they offer 300bps+ of margin expansion opportunity; we assume that two-thirds of this opportunity (equating to $0.18–0.20 of EPS) is indeed realized in the next few years,” Mitchell continued. Meanwhile, investors would focus on how the company deploys its V&C proceeds, while the company is keen to put the remaining balance sheet capacity of $1.4 billion to work.Mitchell said although the move would add $0.45 to EPS, it would increase the leverage “at the very top of the large-cap EE/MI leverage spectrum (implying ~3X ND /EBITDA), and back to a level which management apparently found too high.”Notably, the main aim behind the sale of V&C was to reduce the leverage.”There is a risk that PNR uses the proceeds from selling assets that may be close to a cyclical trough (V&C), to buy businesses that may be close to a cyclical peak (in Water, TS), and the company seems willing to return to a similar balance sheet leverage level (3X) as before the V&C sale took place,”
Other equities research analysts have also recently issued reports about the company. Seaport Global Securities raised Pentair PLC from a “neutral” rating to a “buy” rating and boosted their price objective for the stock from $59.00 to $70.00 in a research note on Friday, June 10th. Vertical Research started coverage on Pentair PLC in a research note on Tuesday, July 19th. They set a “hold” rating on the stock. Morgan Stanley reissued a “hold” rating and set a $68.00 price objective on shares of Pentair PLC in a research note on Friday, August 26th. BMO Capital Markets upped their target price on Pentair PLC from $57.00 to $65.79 and gave the company a “market perform” rating in a research note on Monday, August 22nd. Finally, Buckingham Research reaffirmed a “neutral” rating and set a $62.00 target price on shares of Pentair PLC in a research note on Sunday, August 21st. Two investment analysts have rated the stock with a sell rating, fifteen have issued a hold rating and six have assigned a buy rating to the company. The stock presently has an average rating of “Hold” and an average price target of $59.81.
Shares of Pentair PLC (NYSE:PNR) opened at 61.46 on Monday. Pentair PLC has a one year low of $41.57 and a one year high of $66.99. The company’s 50-day moving average price is $63.05 and its 200 day moving average price is $59.55. The stock’s market capitalization is $11.13 billion.
Pentair PLC (NYSE:PNR) last issued its quarterly earnings data on Thursday, July 28th. The company reported $1.11 earnings per share for the quarter, topping the Thomson Reuters’ consensus estimate of $1.09 by $0.02. Pentair PLC had a return on equity of 17.25% and a net margin of 6.91%. The company had revenue of $1.70 billion for the quarter, compared to analysts’ expectations of $1.72 billion. During the same period in the previous year, the firm posted $1.08 earnings per share. The firm’s revenue for the quarter was up 4.3% on a year-over-year basis. Analysts anticipate that Pentair PLC will post $3.12 EPS for the current year.
In other news, Chairman Randall J. Hogan sold 3,200 shares of the stock in a transaction on Friday, July 15th. The stock was sold at an average price of $64.00, for a total transaction of $204,800.00. Following the completion of the sale, the chairman now owns 5,522 shares in the company, valued at approximately $353,408. The sale was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, Chairman Randall J. Hogan sold 102,282 shares of the stock in a transaction on Thursday, July 28th. The shares were sold at an average price of $64.00, for a total value of $6,546,048.00. Following the sale, the chairman now owns 104,904 shares of the company’s stock, valued at approximately $6,713,856. The disclosure for this sale can be found here. Insiders own 2.30% of the company’s stock.
Several hedge funds have recently modified their holdings of the stock. Raymond James Trust N.A. raised its stake in shares of Pentair PLC by 4.5% in the first quarter. Raymond James Trust N.A. now owns 6,296 shares of the company’s stock valued at $342,000 after buying an additional 269 shares in the last quarter. PGGM Investments raised its stake in shares of Pentair PLC by 2.5% in the first quarter. PGGM Investments now owns 123,553 shares of the company’s stock valued at $6,704,000 after buying an additional 2,994 shares in the last quarter. Commonwealth Equity Services Inc raised its stake in shares of Pentair PLC by 168.9% in the first quarter. Commonwealth Equity Services Inc now owns 24,129 shares of the company’s stock valued at $1,309,000 after buying an additional 15,157 shares in the last quarter. Aperio Group LLC raised its stake in shares of Pentair PLC by 47.8% in the first quarter. Aperio Group LLC now owns 90,077 shares of the company’s stock valued at $4,888,000 after buying an additional 29,144 shares in the last quarter. Finally, Virginia Retirement System acquired a new stake in shares of Pentair PLC during the first quarter valued at approximately $1,960,000. Hedge funds and other institutional investors own 90.53% of the company’s stock.
Pentair PLC Company Profile
Pentair, Inc (Pentair) is a focused diversified industrial manufacturing company. The Company operates in two segments: Water & Fluid Solutions and Technical Products. Water & Fluid Solutions is providing products and systems used worldwide in the movement, storage and treatment of water. Technical Products is engaged in the global enclosures and thermal management markets, designing and manufacturing standard, modified and custom enclosures that house and protect sensitive electronics and electrical components and protect the people that use them.
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