- Price
- $53.45
- Fair value
- $91.00
- Discount
- 41.3%
- Uncertainty
- Medium
- LSEG rating
- 2.33
- Moat
- Narrow
- Next earnings
- 2026-10-27
- Next earnings is estimate
- No
- Company name
- Pentair
- Sector
- Water equipment
- About
- Pentair makes equipment that moves, treats and filters water. It reports three segments. Flow sells pumps and other equipment for homes, farms, buildings and industry. Water Solutions sells water treatment and filtration products for homes and businesses, including restaurant water and ice systems. Pool sells pumps, filters, heaters, lights and automation for residential and commercial pools, mainly through pool distributors and dealers in North America. Pentair earns money from the sale of this equipment and of replacement parts, and much of the Pool business serves existing pools. On October 1, 2026, Pentair bought Taco Group Holdings, a maker of pumps, valves and controls for heating, cooling and data center water systems.
- Thesis
- The market lost trust in Pentair after a sudden profit warning. On July 14, 2026, Pentair said that pool distributors had cut their stock much more than expected, so Q2 2026 sales fell 17% and Pool sales fell 42%. On the same day, it said that its CFO had left, and shareholders then filed a securities class action. Pentair also used debt to buy Taco for about $1.4 billion. Investors now ask whether the pool problem is only a stock correction or also lower end demand, as higher interest rates and inflation weigh on pool owners. For the gap to close, three things must be true. Pentair must meet its guidance of adjusted EPS of $1.05 to $1.08 for Q3 2026 and $4.60 to $4.80 for the full year. Pool orders must return to normal before the 2027 season, as management expects, and Pool sales must grow again in the first half of 2027. Taco must add to profits with the planned $30 million of cost synergies while Pentair reduces the new debt. The Q3 report on October 27, 2026, is the first test, the Q4 report and the 2027 outlook in early 2027 are the second, and the spring 2027 pool season is the main test. If Pool recovers in 2027, the gap can close over the next four to six quarters.
- Risks
- Pool sales depend on pool distributors, dealers and pool owners. If the fall in Q2 2026 comes from lower end demand, because of higher interest rates and inflation, Pool sales can stay low in 2027.
Pentair borrowed about $1.4 billion to buy Taco. The new debt raises interest costs, and Taco must grow and reach the planned cost synergies to earn its price.
Shareholders filed a securities class action in August 2026 about the pool inventory disclosures. A long case or a settlement can add costs and keep the trust problem alive.
The CFO changed twice in 2026, and Robert Hau starts on November 1, 2026. More changes in the finance team can delay the rebuild of trust.
- Balance sheet
- Cash: $92M
Debt: $1.6B
Net debt: $1.5B
Interest cover: 9.5×
Undrawn credit line: $580M
Debt due within 12 months: $3.0M
Last debt due: 2032
Pentair funds itself with senior notes, bank term loans and a revolving credit facility. At June 30, 2026, it had $91.8 million of cash and $1,620 million of debt principal: $400 million of 4.500% notes due 2029, $400 million of 5.900% notes due 2032, $500 million of term loans due from 2027 to 2030 and $320 million drawn on the revolving credit facility due 2030. In May 2026, it repaid the remaining $575 million of an older term loan. Interest cover is operating income divided by net interest expense for the first half of 2026. The figures do not include the Taco purchase. On October 1, 2026, Pentair paid about $1.4 billion for Taco, mostly with a new $1.4 billion unsecured term loan agreement signed on September 1, 2026, so its debt is now almost double the June level. Pentair bought back $348.2 million of shares in the first half of 2026, and $650 million of buyback authority remained at June 30, 2026. Pool cash flows are seasonal, with cash used in the first quarter and cash received in the second quarter.
As of 2026-06-30.
- Checkpoints
- Oct 27, 2026: Q3 2026 results: pool channel and guidance. Pending. Watch: Adjusted EPS within $1.05 to $1.08 and full-year guidance of $4.60 to $4.80 kept pass; another cut to the guidance fails.
Q1 2027 (estimate): Q4 2026 results and 2027 outlook. Pending. Watch: A 2027 outlook with Pool sales growth and a plan to reduce the Taco debt passes; an outlook with flat or lower Pool sales fails.
Q2 2027 (estimate): 2027 pool season. Pending. Watch: Pool sales that grow from a year earlier in the first half of 2027 pass; Pool sales that stay below the 2025 level fail.
- Recent events
- 2026-10-14: Pentair said that it will report its Q3 2026 results before the market opens on October 27, 2026.
2026-10-01: Pentair completed the purchase of Taco Group Holdings, a maker of hydronic and water-based heating, cooling and data center products, for about $1.4 billion. Pentair said that the price was about 10.5 times Taco's expected 2026 EBITDA, after about $165 million of tax benefits and about $30 million of expected annual cost synergies.
2026-09-21: Pentair named Robert Hau, the former CFO of Fiserv, as CFO from November 1, 2026. Interim CFO Robert Fishman will step down on that date.
2026-09-01: Pentair signed a $1.4 billion unsecured term loan agreement to pay for most of the Taco purchase.
2026-08-11: The law firm Bleichmar Fonti & Auld said that a shareholder had filed a securities class action against Pentair and some of its executives in the US District Court for the Southern District of New York (Walters v. Pentair plc). The suit claims that Pentair misled investors about pool channel inventory.
2026-07-28: Pentair reported Q2 2026 results. Sales fell 17% to $933 million because pool distributors cut stock by about $170 million. GAAP EPS was $0.80, and adjusted EPS was $1.14, down from $1.39. Flow and Water Solutions segment income grew 27% and 17%. Pentair kept its 2026 adjusted EPS guidance of $4.60 to $4.80 and agreed to buy Taco.
2026-07-14: Pentair cut its Q2 2026 and full-year guidance because of a large stock correction in the pool channel. CFO Nicholas Brazis left the company on July 10, 2026, and former CFO Robert Fishman returned as interim CFO.