JPMorgan Relays Impressions from Conference Chat with Pentair (PNR) CEO

JPMorgan analyst C. Stephen Tusa, Jr reiterated a Neutral rating on Pentair (NYSE: PNR).

The analyst comments "They recently confirmed 1Q and 2024 guidance at their investor day. On the near term, demand signals at Pool have not changed as it is a business that is consistent and predictable. It’s a book and ship business with 50% of sales going to Pool Corp and it is playing out as expected. They are not assuming an uptick in the 2H and if interest rates come down from current levels that would be upside to the guide. Inventory is working its way through the channel and they expect one more quarter of tough comparisons as 1Q23, the channel was still building inventory. The consumer has been resilient given stubborn inflation and new pools are expected to be down in 2024 to 65-67k vs ~70k in 2023. They put out a 4% list price increase in pool and expect net realization of ~2%. On the pump side, well pumps are ticking at a low level as it’s more rural and housing development and those areas is seeing slower growth. They continue to see the 1H down with the 2H up slightly. Commercial broadly across the portfolio is more resilient, with Manitowoc seeing slight pressure on the top line given tough comps, though see an uptick at Everpure as its more of a replacement product. Larger industrial businesses are resilient with government stimulus still being spent. Agg has been disappointing and they do not see that market as coming back this year. In non-resi by vertical, office and apartments have slowed while data center, senior housing, and warehouse are been stronger. Management noted that when manufacturing gets reshored, distribution also comes back. They believe they can move into end markets that are growing and there are plenty of opportunities to penetrate into."

For an analyst ratings summary and ratings history on Pentair click here. For more ratings news on Pentair click here.

Shares of Pentair closed at $81.25 yesterday.

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