Pentair plc (NYSE:PNR) Second-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year

It's been a good week for Pentair plc (NYSE:PNR) shareholders, because the company has just released its latest quarterly results, and the shares gained 7.9% to US$86.11. The result was positive overall - although revenues of US$1.1b were in line with what the analysts predicted, Pentair surprised by delivering a statutory profit of US$1.11 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Pentair

Taking into account the latest results, Pentair's 18 analysts currently expect revenues in 2024 to be US$4.10b, approximately in line with the last 12 months. Statutory earnings per share are expected to decrease 3.3% to US$3.85 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$4.19b and earnings per share (EPS) of US$3.85 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The average price target was steady at US$94.06even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Pentair at US$101 per share, while the most bearish prices it at US$81.00. This is a very narrow spread of estimates, implying either that Pentair is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.7% by the end of 2024. This indicates a significant reduction from annual growth of 8.9% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.5% annually for the foreseeable future. It's pretty clear that Pentair's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Yet - earnings are more important to the intrinsic value of the business. The consensus price target held steady at US$94.06, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Pentair going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Pentair that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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