Pentair (NYSE:PNR), a company specializing in water treatment and sustainable solutions, saw its price target increased by KeyBanc from $97.00 to $110.00. The firm maintained an Overweight rating on the stock, indicating a positive outlook on its performance.
The adjustment in the price target follows KeyBanc's third-quarter checks on pool equipment, which revealed a consistent demand trajectory compared to the start of the selling season. Despite a year-over-year softness, discussions with channel partners indicated stability in demand during the third quarter.
Additionally, distributors are expected to engage in pre-buy activities slightly more than they did in 2023, aligning with KeyBanc's forecasts. The anticipation of a positive 2025 and long-term setup in the pool equipment sector underpins this outlook.
KeyBanc sees more immediate upside potential for Pentair, citing "controllable self-help tailwinds and easier compares" as factors that could drive near-term growth. The firm's analysis suggests that Pentair is well-positioned to capitalize on market opportunities and improve its financial performance in the foreseeable future.
In other recent news, Hayward Holdings has announced a major change in its shareholder structure. MSD Aqua Partners, LLC, a previous shareholder, has distributed its entire stake in the company to its partners and members. This distribution, part of the winding down of its investment fund, leaves entities affiliated with MSD holding around 3% of Hayward's common stock.
On the financial front, Hayward Holdings reported a modest year-over-year increase in net sales in its second-quarter results. The company also noted six consecutive quarters of gross margin expansion, reaching a record 51%. The operational cash flow saw a 26% rise compared to the first half of the previous year, and the company successfully reduced its net leverage.
Stifel, a financial services firm, has raised its price target on Hayward Holdings' shares to $15.50, maintaining a Hold rating on the stock. This adjustment is based on a 13 times enterprise value to forecasted fiscal year 2026 earnings before interest, taxes, depreciation, and amortization (EV/FY26E EBITDA) multiple.
Lastly, Hayward has acquired ChlorKing, aiming to bolster its presence in the commercial pool market. For the full year 2024, the company anticipates a net sales growth of 2% to 5% and an adjusted EBITDA increase of 3% to 9%.
InvestingPro Insights
To complement the positive outlook on Pentair (PNR) presented in the article, let's look at some insights from InvestingPro for Hayward Holdings (NYSE:HAYW), another key player in the pool equipment sector.
InvestingPro data shows that Hayward has a market capitalization of $3.14 billion and is currently trading at a P/E ratio of 34.63. This relatively high P/E ratio aligns with one of the InvestingPro Tips, which notes that Hayward is "Trading at a high earnings multiple." This could suggest that investors have high expectations for the company's future growth, similar to the positive outlook KeyBanc has for Pentair.
Another relevant InvestingPro Tip highlights Hayward's "Impressive gross profit margins." Indeed, the data shows a gross profit margin of 49.43% for the last twelve months as of Q2 2024. This strong profitability metric could be indicative of Hayward's ability to maintain pricing power in the pool equipment market, which may bode well for the sector as a whole.
Lastly, InvestingPro data reveals that Hayward's revenue for the last twelve months as of Q2 2024 stood at $995.74 million, with a quarterly revenue growth of 0.3% in Q2 2024. While modest, this growth aligns with the article's mention of stability in demand for pool equipment.
For investors interested in a deeper dive into Hayward's financials and prospects, InvestingPro offers 7 additional tips, providing a more comprehensive analysis of the company's position in the market.
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