Credit where due – Pentair’s (PNR) management has done a good job of streamlining and improving this business, shifting the sentiment away from Pentair’s legacy as a disappointing, under-executing, would-be empire-builder. There’s a lot to like about a business with a large aftermarket revenue mix, strong margins, and good market share, and there could be further portfolio transformation in the future.
All of that said, the strong growth in the Pool business over the last 12-18 months will make for tougher comps, particularly as the pandemic-driven remodel/renovation trend seems to be falling off. Moreover, while the mid-single-digit revenue growth and double-digit FCF growth I expect from Pentair compares well to many industrials, the valuation is already pretty fair today.
Read more here:
Pentair Establishing Tough Comps, And The Valuation Is No Clear Bargain
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