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Pentair plc (PNR) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Pentair plc (PNR - Free Report) ? Shares have been on the move with the stock up 10.7% over the past month. The stock hit a new 52-week high of $96.3 in the previous session. Pentair plc has gained 32% since the start of the year compared to the 12.1% move for the Zacks Industrial Products sector and the 28.1% return for the Zacks Manufacturing - Thermal Products industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 23, 2024, Pentair reported EPS of $1.22 versus consensus estimate of $1.15 while it beat the consensus revenue estimate by 0.76%.
For the current fiscal year, Pentair is expected to post earnings of $4.25 per share on $4.1 billion in revenues. This represents a 13.33% change in EPS on a -0.12% change in revenues. For the next fiscal year, the company is expected to earn $4.82 per share on $4.25 billion in revenues. This represents a year-over-year change of 13.24% and 3.64%, respectively.
Valuation Metrics
Pentair may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Pentair has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 22.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 22.6X. On a trailing cash flow basis, the stock currently trades at 21.5X versus its peer group's average of 17.1X. Additionally, the stock has a PEG ratio of 1.73. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Pentair currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Pentair fits the bill. Thus, it seems as though Pentair shares could have potential in the weeks and months to come.
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Pentair plc (PNR) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Pentair plc (PNR - Free Report) ? Shares have been on the move with the stock up 10.7% over the past month. The stock hit a new 52-week high of $96.3 in the previous session. Pentair plc has gained 32% since the start of the year compared to the 12.1% move for the Zacks Industrial Products sector and the 28.1% return for the Zacks Manufacturing - Thermal Products industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 23, 2024, Pentair reported EPS of $1.22 versus consensus estimate of $1.15 while it beat the consensus revenue estimate by 0.76%.
For the current fiscal year, Pentair is expected to post earnings of $4.25 per share on $4.1 billion in revenues. This represents a 13.33% change in EPS on a -0.12% change in revenues. For the next fiscal year, the company is expected to earn $4.82 per share on $4.25 billion in revenues. This represents a year-over-year change of 13.24% and 3.64%, respectively.
Valuation Metrics
Pentair may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Pentair has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 22.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 22.6X. On a trailing cash flow basis, the stock currently trades at 21.5X versus its peer group's average of 17.1X. Additionally, the stock has a PEG ratio of 1.73. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Pentair currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Pentair fits the bill. Thus, it seems as though Pentair shares could have potential in the weeks and months to come.