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Quote this valuation with its source: Fair value, Potential value and the price at analysis.
FAQ
PNR — frequently asked questions
Is Pentair plc overvalued?
In our latest published analysis dated 2026-10-15, PNR looks meaningfully undervalued. The price recorded at analysis is 52,1 USD versus our fair value of 73,7 USD; the high endpoint is presented separately as potential value of 87,4 USD. That implies roughly 41.4% upside to fair value at that date.
Our latest published report, analyzed 2026-10-15, gives PNR a fair value of 73,7 USD and a potential value of 87,4 USD. The conclusion is triangulated across multiple valuation models and weighted by reliability for Pentair plc's archetype; it is a dated research output, not a live price.
Should I buy PNR now?
Our latest published rating for PNR, analyzed 2026-10-15, is Strong Buy. Pentair plc looks meaningfully undervalued at the analysis-date price of 52,1 USD versus fair value of 73,7 USD; potential value is 87,4 USD. This is research for educational purposes, not personalized investment advice.
What are the biggest risks for PNR?
The dedicated bear-case section in our report analyzed 2026-10-15 documents Pentair plc's material risks, evidence, thresholds, and thesis-invalidation conditions. Scenario-specific explanations remain in that section so the report does not repeat or decontextualize them elsewhere.
What is PNR's rating?
Our latest published rating for PNR, analyzed 2026-10-15, is Strong Buy, with a published moat assessment of 7/10 (Narrow). It reflects our fair value of 73,7 USD, the potential value of 87,4 USD, and the price recorded at analysis (52,1 USD).
Ten raport nie został jeszcze przetłumaczony. Odśwież za kilka minut, gdy kolejka tłumaczeń go przetworzy.
§1 Podsumowanie wykonawczeEN
Odpowiedź w 30 sekundStrong Buy
Cena a wartość
Cena
$52.11
Wartość godziwa
$73.66
Wartość potencjalna
$87.40
Stan na
2026-10-14
Dlaczego to może zadziałać
Accelerated consumer adoption of energy-efficient variable-speed pool pumps, connected automation systems, and advanced membrane filtration solutions, driving operating margin expansion and double-digit per-share earnings compounding as residential construction normalizes.
Co zmieniłoby naszą ocenę
Customer One demands steep pricing concessions or executes aggressive inventory destocking amid prolonged residential housing and pool installation softness.
We assign Pentair plc a Strong Buy rating, reflecting 41.4% upside to Fair value of $73.66 supported by high-margin aftermarket demand and exceptional free cash flow generation.
Pentair carries a house rating of Strong Buy, signaling that the shares offer substantial risk-adjusted return potential for long-term investors seeking high-quality industrial compounders.
Evaluated at $52.11 (as of 2026-10-14), the shares trade at a significant discount to our Fair value of $73.66, with Potential value reaching $87.40, implying 41.4% upside to the central valuation anchor.
The primary downside risk centers on distributor concentration in the residential pool equipment franchise, where Customer One accounted for 18% of consolidated sales in FY2025. If prolonged mortgage rate pressures prolong the housing construction slump, distributor inventory destocking and pricing concessions could compress Pool segment below 28%, dampening consolidated operating profit and .
The primary catalyst for outperformance is the non-discretionary nature of pool equipment replacement and specialized commercial filtration, where Pentair generates over 60% of pool sales from the installed base. Asset-light assembly requires minimal capex of $68.8M, enabling free cash flow conversion of 114.1% ($746.0M FCF) that self-funds disciplined share repurchases and compound value per share.5,6,7
High-Margin Aftermarket Replacement Demand
Over 60% of Pool revenue is recurring maintenance and replacement of pumps, filters, and sanitizers, generating a 33.81% operating margin.7
Differentiated Flow and Water Solutions
Proprietary commercial fluid handling and membrane filtration deliver 23.31% Flow margin and 23.91% Water Solutions margin, outperforming diversified peer profitability.7
Exceptional Free Cash Flow Conversion and Capital Returns
We rate Pentair plc a Strong Buy because durable pool aftermarket replacement demand, asset-light manufacturing, and superior cash conversion support substantial earnings compounding at an attractive valuation.
Przegląd spółki
Pentair plc is a global water solutions company delivering specialized fluid management, water treatment, and pool equipment franchises. The business operates across three primary reportable segments: Pool, Flow, and Water Solutions, serving residential, commercial, and industrial end-markets globally with localized delivery networks.
The company's offerings encompass energy-efficient swimming pool pumps, filters, heaters, automated controls, commercial fluid motion systems, and sustainable water filtration membranes. End-user demand experiences seasonal highs from April through September in alignment with warm weather patterns, which Pentair balances through dealer early-buy advance sale programs and non-discretionary aftermarket replacement cycles.
Management assesses enterprise performance using net sales and reportable segment operating income, focusing on return on sales to track operational transformation across specialized water platforms.
§2 Scenariusz negatywnyEN
Under an extreme cyclical stress test combining a 10% consolidated revenue drop and a 300 basis point operating margin compression, Pentair's asset-light assembly model provides crucial operating resilience. Because maintenance capital expenditures require only 1.65% of revenue ($68.8M in FY2025) and variable production costs can be flexed rapidly, operating cash flow remains comfortably positive. With total debt of $1,764.7M as of October 15, 2026, annual interest expense is readily covered even in a trough EBITDA scenario. The primary financial impairment under this stress scenario would be a temporary curtailment of share buybacks rather than balance sheet distress, preserving solvency while earnings normalize.
Persistent mortgage rate pressure depressing new pool installations and discretionary remodels
Distributor inventory destocking and pricing pushback compressing operating margins
Jak ta teza może się załamać
Severe pool distributor inventory destocking and pricing pushback by Customer One
Customer One accounts for 18% of consolidated net sales in the Pool business. Prolonged high interest rates suppress new pool construction, triggering aggressive distributor destocking and volume discount demands that compress Pool segment operating margin from 33.81% toward 25.0%, pulling consolidated operating margin below 17.5% within 12 months.7
FV impact
-3.5%
Operating margin 3 points lower throughout
Trigger
Within 12 months
Sygnały wczesnego ostrzegania do monitorowania
Pięć zdarzeń, które osłabiłyby naszą tezę inwestycyjną.
Distributor pricing concessions and aggressive volume destocking eroding the core aftermarket earnings engine.
Obecnie:33.81% (FY2025)
Alarm, jeśli< 28.0%
02
Customer One Concentration Share
Excessive wholesale channel concentration increasing distributor and destocking risk.
§3 Przewaga konkurencyjnaEN
Narrow
Pentair possesses a narrow economic moat founded on structural advantages across its specialized water and fluid management franchises. The primary competitive advantage resides in its Pool segment, where an extensive installed base of residential swimming pools generates predictable, non-discretionary aftermarket replacement demand. Pool pumps, filtration equipment, heaters, and sanitizers require replacement every five to eight years regardless of broader economic conditions, creating a recurring revenue stream that insulates Pentair from cyclical swings in new pool construction. This installed base advantage is amplified by close alignment with specialized wholesale distributors such as Customer One, which accounted for 18% of consolidated sales in FY2025.
In Flow and Water Solutions, Pentair's economic moat is reinforced by switching costs and technical differentiation in critical commercial and industrial fluid handling applications. Specialized pumps and filtration systems are engineered to precise customer specifications, integrated into larger plumbing and wastewater infrastructures, and subject to stringent municipal and environmental compliance standards. These technical barriers prevent routine brand substitution and allow Pentair to sustain operating margins of 23.31% in Flow and 23.91% in Water Solutions, outperforming diversified multi-industrial peers such as Dover (18.69%) and Xylem (17.00%).
These structural moats translate into superior financial returns. Return on invested capital consistently exceeds Pentair's computed 8.68% WACC and 9.46% cost of equity, supported by asset-light assembly operations requiring capital expenditures of just 1.65% of revenue ($68.8M in FY2025). While customer concentration in wholesale distribution introduces channel volatility, deep contractor relationships and brand preference ensure durable economic profit generation over the investment horizon.
Zysk ekonomiczny
Pentair generates returns on capital comfortably above its cost of capital, reflecting durable economic profit. The company's return on equity of 17.13% in FY2025 and enterprise ROIC exceed its computed 8.68% WACC and 9.46% cost of equity. This spread is sustained by high operating margins across Pool (33.81%), Flow (23.31%), and Water Solutions (23.91%), supported by asset-light assembly requiring just 1.65% capex-to-revenue ($68.8M capex in FY2025).2,6,7
7/ 10
Narrow
Sources of advantage
01Installed Base and Aftermarket Distribution Network — Over 60% of Pool segment revenue is non-discretionary aftermarket replacement of pumps, filters, heaters, and sanitizers every 5-8 years across an expanding residential installed base. Sales flow through specialized wholesale distributors like Customer One (18% of consolidated sales in FY2025), creating distributor alignment and strong installer loyalty.Wide
02Proprietary Fluid Engineering and Switching Costs — Proprietary engineering in mission-critical commercial pumping, membrane filtration, and industrial fluid motion creates specification lock-in and high switching costs, generating 23.31% operating margin in Flow and 23.91% in Water Solutions, outperforming diversified peer margins (Dover at 18.69%, Generac at 17.93%, Xylem at 17.00%).
Znane zagrożenia dla przewagi
Zagrożenie
Powaga
Oś czasu
Złagodzenie
Distributor bargaining power and inventory volatility from Customer One concentration
medium
12-24 months
Pentair's end-user brand preference and certified pool installer training programs create pull-through demand that prevents distributors from substituting competing equipment.
The highlighted cell is Fair value when every assumption sits at its base level ($73.66). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $678.9M after modeled reinvestment of $35.7M, with terminal value at 78.0% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
The Base case establishes a target of $73.66, representing 41.4% implied return from $52.11 (as of 2026-10-14) with an assigned probability of 60.0%. This scenario assumes the residential pool replacement cycle resumes normalized seasonal patterns, Flow and Water Solutions deliver steady mid-single digit volume growth, and operating margins expand gradually supported by enterprise transformation initiatives.
Maintain Strong Buy; Maintain position conviction; verify whether outperformance stems from enduring market share gains or one-off wholesale stocking timing.
Wyzwalacz: Consolidated revenue and diluted earnings exceed consensus expectations, driven by earlier-than-projected volume recovery in residential pool equipment and expanding flow margins.
Outperformance confirms that distributor destocking has completed and validates the multi-year earnings compounding trajectory toward FY2027.
Zgodnie
Maintain Strong Buy; Hold existing allocation; monitor quarterly progress on operational transformation programs.
Wyzwalacz: Operating revenue and margins match consensus projections with normal seasonal cash flow generation.
In-line execution demonstrates business stability along the projected cyclical baseline, keeping long-term earnings growth on track.
Poniżej
Downgrade the rating; Re-examine channel concentration risks; assess whether segment operating margins have breached fundamental support thresholds before executing adjustments.
Wyzwalacz: Consolidated revenue contracts significantly below consensus due to persistent distributor destocking in Pool, accompanied by marked operating margin compression.
A substantial shortfall driven by distributor margin concessions would indicate pricing power erosion, requiring a reassessment of terminal multiple assumptions.
Jakość wyników
Earnings quality remains robust, characterized by operating cash flows that consistently exceed reported net income and minimal maintenance capital expenditure requirements. Free cash flow conversion remains well above net income, supported by disciplined inventory management and stable receivable turnover across wholesale distribution channels, ensuring that accounting profits translate directly into liquid cash without aggressive accrual distortions.6
Dynamika prognoz
Consensus revenue and earnings estimates for FY2027 have experienced positive upward revisions over recent trailing windows, reflecting growing confidence in cyclical stabilization and margin resilience.
Pentair generated $814.8M in operating cash flow and $746.0M in free cash flow in FY2025 on GAAP net income of $653.8M, delivering an exceptional free cash flow conversion rate of 114.1%. Capital expenditures were modest at $68.8M, representing just 1.65% of consolidated revenue of $4,176.0M.5,6
Alokacja kapitału
Capital allocation is anchored by disciplined reinvestment, debt service, and equity returns. In FY2025, capital expenditures consumed only $68.8M, while stock-based compensation totaled $37.0M. Total debt stood at $1,764.7M as of October 15, 2026. With annual exceeding $700M, Pentair maintains sufficient liquidity to service at an effective tax rate of 13.58% and pre-tax debt cost of 5.75%, while returning capital via dividends ($1.08 per share base assumption) and opportunistic share repurchases.
Return on invested capital continues on an upward trajectory, supported by operational transformation initiatives and mix shift toward higher-margin commercial water treatment. Return on equity of 17.13% in FY2025 comfortably outpaces the 9.46% cost of equity.
Najnowsze wolne przepływy pieniężne746 mln USDFY2025
Dług netto1,5 mld USDFY2025
Struktura rachunku zysków i stratJak skala działalności przekłada się na raportowany zysk.30 cze 2026
StockMarketAgent.AI
Przychody932,6 mln USDKoszt sprzedaży−537,6 mln USDZysk brutto395 mln USDKoszty operacyjne−228,5 mln USDZysk operacyjny166,5 mln USDPozycje pozaoperacyjne i podatki−37,9 mln USDZysk netto128,6 mln USD
Dane historii finansowej
Przychody
932 600 000 USD
Koszt sprzedaży
537 600 000 USD
Zysk brutto
395 000 000 USD
Koszty operacyjne
228 500 000 USD
Zysk operacyjny
166 500 000 USD
Pozycje pozaoperacyjne i podatki
-37 900 000 USD
Zysk netto
128 600 000 USD
Podsumowanie bilansuJak wykazane aktywa są utrzymywane i finansowane w wybranym okresie.
StockMarketAgent.AI
Struktura aktywówFinansowane przez
Aktywa ogółem6,9 mld USDŚrodki pieniężne101,6 mln USDAktywa obrotowe1,5 mld USDZobowiązania ogółem3 mld USDZobowiązania krótkoterminowe959,3 mln USDKapitał własny3,9 mld USD
Dane podziału bilansu
Aktywa ogółem
6 868 800 000 USD
Środki pieniężne
101 600 000 USD
Aktywa obrotowe
1 541 800 000 USD
Zobowiązania ogółem
2 999 600 000 USD
Zobowiązania krótkoterminowe
959 300 000 USD
Kapitał własny
3 869 200 000 USD
Most przepływów pieniężnychJak przepływy operacyjne przełożyły się na wolne przepływy pieniężne w FY2025.
StockMarketAgent.AI
Uzgodnienie przepływów operacyjnych
Zysk netto653,8 mln USDAmortyzacja+117,7 mln USDWynagrodzenie w akcjach+37 mln USDPozostałe korekty operacyjne+6,3 mln USDOperacyjne przepływy pieniężne814,8 mln USD
Uzgodnienie środków na początek i koniec
Środki pieniężne na początek118,7 mln USDOperacyjne przepływy pieniężne+814,8 mln USDPrzepływy inwestycyjne−404,5 mln USDPrzepływy finansowe−402,5 mln USDWpływ kursów walutowych−24,9 mln USDŚrodki pieniężne na koniec101,6 mln USD
814,8 mln USD − 68,8 mln USDWolne przepływy pieniężne 746 mln USD
Dane mostu przepływów pieniężnych
Zysk netto
653 800 000 USD
Wpływy operacyjne
814 800 000 USD
Amortyzacja
117 700 000 USD
Wynagrodzenie w akcjach
37 000 000 USD
Pozostałe korekty operacyjne
6 300 000 USD
Operacyjne przepływy pieniężne
814 800 000 USD
Dostępne środki pieniężne
933 500 000 USD
Środki pieniężne na początek
118 700 000 USD
Wydatki inwestycyjne
404 500 000 USD
Capex
68 800 000 USD
Pozostała działalność inwestycyjna
335 700 000 USD
Wydatki finansowe
402 500 000 USD
Skup akcji
225 000 000 USD
Wypłacone dywidendy
164 300 000 USD
Spłata długu netto
10 400 000 USD
Pozostała działalność finansowa
2 800 000 USD
Wpływ kursów walutowych
24 900 000 USD
Środki pieniężne na koniec
101 600 000 USD
Przepływy inwestycyjne
-404 500 000 USD
Przepływy finansowe
-402 500 000 USD
Przychody według segmentu operacyjnegoUdział w łącznych przychodach za 2025-12-31.
4,2 mld USDŁączne przychody
Przychody według segmentu operacyjnegoUdział
Pool1,6 mld USD37,3%+8,5% r/r
Flow1,6 mld USD37,2%+2,6% r/r
Water Solutions1,1 mld USD25,4%−6,1% r/r
Źródło: SEC EDGAR · Złożono 2026-02-24 · SEC EDGAR
Dane o strukturze przychodów: Przychody według segmentu operacyjnego
Przychody według segmentu operacyjnego
Przychody
Udział
r/r
Pool
1,6 mld USD
37,3%
8,5%
Flow
1,6 mld USD
37,2%
2,6%
Water Solutions
1,1 mld USD
25,4%
-6,1%
Przychody według regionuUdział w łącznych przychodach za 2025-12-31.
4,2 mld USDŁączne przychody
Przychody według regionuUdział
United States2,9 mld USD70,4%+3,7% r/r
Developing507,8 mln USD12,2%−3,7% r/r
Western Europe496 mln USD11,9%+0,5% r/r
Other Developed234,1 mln USD5,6%+2,4% r/r
Źródło: SEC EDGAR · Złożono 2026-02-24 · SEC EDGAR
Dane o strukturze przychodów: Przychody według regionu
Przychody według regionu
Przychody
Udział
r/r
United States
2,9 mld USD
70,4%
3,7%
Developing
507,8 mln USD
12,2%
-3,7%
Western Europe
496 mln USD
11,9%
0,5%
Other Developed
234,1 mln USD
5,6%
2,4%
Przychody i wynikiJak skala działalności przekłada się na raportowany zysk.
Gotówka i zadłużenieDostępna płynność wobec całkowitego zadłużenia.
Generowanie gotówkiPrzepływy operacyjne w porównaniu z wolnymi przepływami pieniężnymi.
RentownośćZmiany marży brutto, operacyjnej i netto.
Dane finansowe na określony moment użyte w analizie z 2026-10-15.
Dane historii finansowej
Okres
Przychody
EBITDA
Zysk netto
Operacyjne przepływy pieniężne
Wolne przepływy pieniężne
Capex
Amortyzacja
Wynagrodzenie w akcjach
Skup akcji
Wypłacone dywidendy
Emisja długu netto
Przepływy inwestycyjne
Przepływy finansowe
Środki pieniężne na początek
Środki pieniężne na koniec
Gotówka i inwestycje
Zadłużenie ogółem
Marża operacyjna
ROIC
WACC
Spread ROIC−WACC
2016-12-31
2,8 mld USD
797,8 mln USD
522,2 mln USD
861,4 mln USD
818,1 mln USD
43,3 mln USD
88,4 mln USD
34,2 mln USD
0 USD
243,6 mln USD
—
-121,8 mln USD
-600,1 mln USD
—
216,9 mln USD
216,9 mln USD
4,3 mld USD
12,7%
—
6,2%
—
2017-12-31
2,8 mld USD
488,6 mln USD
666,5 mln USD
620,2 mln USD
581,1 mln USD
39,1 mln USD
87,2 mln USD
39,6 mln USD
200 mln USD
251,7 mln USD
—
2,6 mld USD
-3,4 mld USD
216,9 mln USD
86,3 mln USD
86,3 mln USD
1,4 mld USD
13,3%
—
6,7%
—
2018-12-31
3 mld USD
552,8 mln USD
347,4 mln USD
439,1 mln USD
390,9 mln USD
48,2 mln USD
84,6 mln USD
20,9 mln USD
500 mln USD
187,2 mln USD
—
-68,8 mln USD
-407,9 mln USD
86,3 mln USD
74,3 mln USD
74,3 mln USD
787,6 mln USD
14,7%
—
6,8%
—
2019-12-31
3 mld USD
513,2 mln USD
355,7 mln USD
353 mln USD
294,5 mln USD
58,5 mln USD
80 mln USD
21,4 mln USD
150 mln USD
122,7 mln USD
—
-331,9 mln USD
-17,1 mln USD
74,3 mln USD
82,5 mln USD
82,5 mln USD
1 mld USD
14,6%
—
6,1%
—
2020-12-31
3 mld USD
531,1 mln USD
358,6 mln USD
573,6 mln USD
511,4 mln USD
62,2 mln USD
75,1 mln USD
20,3 mln USD
150,2 mln USD
127,1 mln USD
—
-117,9 mln USD
-435,9 mln USD
82,5 mln USD
82,1 mln USD
82,1 mln USD
839,6 mln USD
15,3%
—
5,4%
—
2021-12-31
3,8 mld USD
716,8 mln USD
553 mln USD
613,2 mln USD
553 mln USD
60,2 mln USD
77,5 mln USD
29,8 mln USD
150 mln USD
133 mln USD
—
-390,7 mln USD
-222,2 mln USD
82,1 mln USD
94,5 mln USD
94,5 mln USD
894,1 mln USD
16,9%
—
6,0%
—
2022-12-31
4,1 mld USD
719 mln USD
480,9 mln USD
363,3 mln USD
278,1 mln USD
85,2 mln USD
106,6 mln USD
24,9 mln USD
50 mln USD
138,6 mln USD
1,4 mld USD
-1,6 mld USD
1,2 mld USD
94,5 mln USD
108,9 mln USD
108,9 mln USD
2,3 mld USD
14,4%
—
7,5%
—
2023-12-31
4,1 mld USD
739,2 mln USD
622,7 mln USD
619,2 mln USD
543,2 mln USD
76 mln USD
114,8 mln USD
29,1 mln USD
0 USD
145,2 mln USD
-332,5 mln USD
-85,4 mln USD
-468,1 mln USD
108,9 mln USD
170,3 mln USD
170,3 mln USD
2 mld USD
18,0%
—
8,4%
—
2024-12-31
4,1 mld USD
922,1 mln USD
625,4 mln USD
766,7 mln USD
692,3 mln USD
74,4 mln USD
114,6 mln USD
39,7 mln USD
150 mln USD
152,3 mln USD
-343,7 mln USD
-187,6 mln USD
-636,7 mln USD
170,3 mln USD
118,7 mln USD
118,7 mln USD
1,6 mld USD
19,7%
—
9,2%
—
2025-12-31
4,2 mld USD
943,6 mln USD
653,8 mln USD
814,8 mln USD
746 mln USD
68,8 mln USD
117,7 mln USD
37 mln USD
225 mln USD
164,3 mln USD
-10,4 mln USD
-404,5 mln USD
-402,5 mln USD
118,7 mln USD
101,6 mln USD
101,6 mln USD
1,6 mld USD
20,5%
—
8,8%
—
§9 Porównanie wyceny z konkurentami
Wartość godziwaReport-date price
Pentair plcPNR
Cena / wartość godziwa
Wartość godziwa73,66 USDReport-date price52,11 USD
Data oceny
Przewaga konkurencyjnaNarrow
Karta wyników inwestycyjnych63 / 100
Generac Holdings Inc.GNRC
Cena / wartość godziwa
Wartość godziwa192,98 USDReport-date price207,44 USD
Data oceny
Przewaga konkurencyjnaNarrow
Karta wyników inwestycyjnych61 / 100
Xylem Inc.XYL
Cena / wartość godziwa
Wartość godziwa90,73 USDReport-date price102,53 USD
Data oceny
Przewaga konkurencyjnaNarrow
Karta wyników inwestycyjnych62 / 100
Pentair plcPNR
Cena / wartość godziwa
Wartość godziwa73,66 USDReport-date price52,11 USD
Pentair plc (PNR) trades at 10.7x forward earnings against a peer median of 16.6x. Its EV/EBITDA of 9.7x compares with a peer median of 15.7x. The comparison uses 4 peers: Generac Holdings Inc., Xylem Inc., Dover Corporation and Ingersoll Rand Inc., as of 2026-10-15.
§10 Branża i cyklEN
Faza cyklu
Trough
The broader industry capital cycle displays capex-to-revenue of 4.1% and capex-to-depreciation of 0.68. Pentair operates with an even more asset-light model, recording FY2025 capital expenditures of $68.8M (1.65% of revenue of $4,176.0M) against depreciation of $117.7M. Consensus forecasts project FY2026 revenue contracting -3.4% before rebounding +18.2% in FY2027, signaling that channel destocking is reaching a cyclical bottom.1,6
Cykl byczy
An expansionary industry cycle is catalyzed by normalizing mortgage interest rates, accelerating single-family home turnover, and regulatory mandates for energy-efficient variable-speed pool pumps. Under these conditions, delayed pool remodeling transitions into active replacement, while commercial and municipal investments in membrane filtration and sustainable fluid handling drive high single-digit volume expansion and operating leverage.
Cykl niedźwiedzi
A downcycle scenario is driven by sustained high interest rates, depressed housing turnover, and deferred discretionary residential spending. Distributors respond by aggressively reducing inventory levels, while end-users delay non-essential pool equipment upgrades, pressuring wholesale order rates and capping price realization across residential categories.
Trendy długoterminowe
Trend
Wpływ
Uwaga
Electrification and Variable-Speed Energy Efficiency Mandates
positive
Federal and state energy efficiency standards require variable-speed pool pumps, which carry higher unit pricing and richer margins than single-speed predecessors, expanding revenue per installed pool pad.
Water Quality Scarcity and Industrial Membrane Filtration
positive
Pozycjonowanie
Pentair is exceptionally well positioned at the intersection of specialized fluid management and residential water equipment. With more than 60% of Pool segment revenue derived from non-discretionary aftermarket replacement, the company is far more insulated from housing starts than traditional building materials suppliers. Furthermore, premium operating margins in Flow (23.31%) and Water Solutions (23.91%) outperform general industrial machinery peers (Dover at 18.69%, Xylem at 17.00%), reflecting superior pricing defensibility and technological differentiation.3,7
Risk management mandates rigorous tracking of channel inventory sell-through, housing remodeling activity, and free cash flow conversion. Rebalance exposure if share price reaches Potential value $87.40, or if fundamental checkpoints signal structural margin erosion.
Transze wejścia
Poziom
Działanie
Dlaczego
$52.11
Initial Allocation
Initiate core position at $52.11 (as of 2026-10-14) to capture the 41.4% upside to Fair value.
Review distribution pricing concessions, demote moat durability, and adjust valuation multiples downward.
§12 Perspektywy inwestorówEN
Value / Total Return
Buy
Trading at $52.11 with 41.4% upside to Fair value $73.66, Pentair offers compelling total return potential supported by strong cash generation.
Quality Compounder
Buy
A narrow economic moat driven by high Pool operating margins (33.81% in FY2025) and asset-light assembly enables steady high-return capital reinvestment and share repurchases.7
Defensive / Cash Flow
Buy
Resilient aftermarket replacement demand and free cash flow conversion of 114.1% ($746.0M FCF in FY2025 on $653.8M net income) provide robust downside protection against cyclical fluctuations.5,6
§14 Końcowa rekomendacjaEN
Działanie
Zdecydowanie kupuj
Pentair presents an exceptional risk-adjusted investment opportunity at $52.11 (as of 2026-10-14), offering 41.4% upside to Fair value of $73.66 with Potential value reaching $87.40.
The combination of high-margin pool equipment aftermarket replacement demand, specialized water treatment technologies, and superior free cash flow conversion supports sustainable high single-digit earnings compounding.
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Sources
The records this analysis drew on, as they stood when it was run.
Analyst consensusData as of 2026-10-15 · Published 2026-10-15 · Provider-adjusted · cited for 2 figuresCited in Branża i cykl, Drzewo decyzyjne wyników
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
The downside path models prolonged macroeconomic weakness where elevated interest rates suppress residential pool construction and discretionary renovations, while distributor destocking and volume discount demands compress segment profitability. We would recognize this outcome if Pool operating margin falls below fundamental support levels or if consolidated revenue contracts across multiple reporting periods.
Protracted housing and residential remodel slump capping water equipment replacement
Consensus FY2026 revenue is already projected to decline -3.4%. Persistent mortgage rate pressure and deferred residential pool equipment upgrades eliminate the projected FY2027 rebound (+18.2% in house forecast), causing revenue growth to lag base expectations by 500 bps annually over the 5-year forecast horizon.
FV impact
-6.6%
Revenue and EPS growth 5 points lower for five years
Trigger
Within 24 months
Multiple de-rating from terminal multiple contraction amid slowing water compounding
Pentair currently trades at a forward P/E of 10.73x. If the market prices Pentair as a cyclical building products supplier rather than a premium water compounder, the terminal P/E multiple fails to reach the assumed 15.0x and de-rates by 20% to 12.0x within 18 months, significantly reducing forward earnings fair value.4
Scale competition from multi-industrial conglomerates in standard commercial fluid pumping
medium
24-36 months
Focusing on highly specialized, energy-efficient fluid movement and proprietary membrane filtration allows Pentair to sustain superior segment profitability compared to broader diversified machinery peers.3
Discounted forecast-period cash flows (20,05 USD) plus discounted terminal value (71,15 USD) minus signed per current share (9,51 USD) equals the 81,69 USD lens value shown above. Negative net debt is , so subtracting it raises value.
Multiply the peer median PEG by this stock's forecast growth to derive an implied forward P/E, then apply it to forward EPS.
How this lens was calculated
Inputs used in this report
Opportunistic share repurchases accelerate diluted earnings per share growth
The Bull case projects a target of $87.40, yielding 67.7% return from $52.11 (as of 2026-10-14) with an assigned probability of 20.0%. This path requires accelerated adoption of connected pool automation and energy-efficient systems, robust commercial water filtration demand, operating margins expanding toward peak levels, and active share repurchases compounding per-share value.
Dlaczego to ważne
Tracks wholesale distribution reliance; rapid increases or abrupt inventory contractions signal distributor leverage shifts and channel destocking risks.
Validates cash generation quality; conversion falling below net earnings signals working capital absorption or unbudgeted capital intensity, reducing share repurchase capacity.
Pool segment operating margin reached 33.81%, Flow reached 23.31%, and Water Solutions reached 23.91%, compared to Dover at 18.69% and Xylem at 17.00%.
Specialized fluid and pool franchises sustain pricing power even during volume-soft macro environments.
Asset-light operating structure minimizes maintenance capital intensity
FY2025 capex of $68.8M was less than 60% of annual depreciation of $117.7M, and well below the industry capex-to-depreciation benchmark of 0.68.
Low fixed-capital intensity shields earnings from operating leverage traps during downcycles and maximizes equity compounding.
Dover CorporationDOV
Cena / wartość godziwa
Wartość godziwa162,66 USDReport-date price190,17 USD
Data oceny
Przewaga konkurencyjnaNarrow
Karta wyników inwestycyjnych64 / 100
Ingersoll Rand Inc.IR
Cena / wartość godziwa
Wartość godziwa61,46 USDReport-date price77,78 USD
Data oceny
Przewaga konkurencyjnaNarrow
Karta wyników inwestycyjnych61 / 100
Marża
PNR
Pentair plc
$8.4B
10.7x
2.1x
9.7x
17.1%
—
GNRC
Generac Holdings Inc.
$11.7B
15.3x
2.6x
20.2x
9.5%
17.9%
XYL
Xylem Inc.
$24.0B
16.5x
2.6x
13.2x
9.2%
17.0%
DOV
Dover Corporation
$26.0B
16.6x
3.1x
14.4x
14.9%
18.7%
IR
Ingersoll Rand Inc.
$30.2B
19.9x
3.8x
16.9x
9.5%
16.9%
Tightening environmental regulations and municipal wastewater standards drive recurring demand for specialized fluid motion and ultrafiltration systems across Water Solutions ($1,062.1M revenue in FY2025).
Residential Housing Remodel Sensitivity to Interest Rates
negative
Elevated mortgage rates and sluggish existing home turnover dampen new swimming pool construction and discretionary backyard renovations, prolonging volume softness in new-build channels.
