Pentair (PNR) Valuation in Focus After Upbeat Q2 2025 Earnings and Upgraded Outlook

For investors watching Pentair (PNR), the company’s latest results give plenty to think about. Pentair just beat earnings projections for the second quarter of 2025 and raised both its adjusted EPS guidance and sales outlook for the year. This comes at a time when investors are particularly alert to companies showing clear momentum, and Pentair’s confident update might suggest even more robust days ahead, especially as it reaffirms its quarterly dividend payout.

Looking at the bigger picture, Pentair’s shares have not just kept pace but have outperformed many benchmarks over the past year, rising about 14%. That strength has built on a run of positive developments, such as the completed acquisition of Hydra-Stop and recent recognition among low-leverage picks for market stability. While the stock did not move dramatically in the last week, its steady climb over the past year and three years stands out, with momentum clearly on the upswing lately.

Given these gains and the company’s upgraded outlook, is Pentair still undervalued at current levels, or are markets already factoring in much of its future growth potential?

Most Popular Narrative: 4.9% Undervalued

The prevailing narrative suggests Pentair is currently undervalued by nearly 5%, based on bullish mid-term forecasts for its revenue and margins.

"Pentair is expected to benefit from growing momentum in longer-cycle infrastructure and industrial water projects, supported by accelerating municipal and industrial investments in water reuse, filtration, and flow solutions. This should drive more resilient multi-year revenue growth beyond near-term residential softness. The company's ongoing focus on product innovation, including connected, digitally enabled water management systems and higher-margin filtration solutions, is positioning Pentair to capture additional recurring aftermarket revenue streams and expand long-term net margins."

How does a water solutions leader earn a valuation close to fair value, even as analysts expect a big transformation in earnings and profit margins? There is a vital financial forecast hiding in this narrative, a precise mix of earnings power, future profitability, and a bold industry multiple. Want to know the key numbers driving Pentair’s price target? The answers are in the details.

Result: Fair Value of $115.37 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent weakness in residential demand or resistance to further price hikes could challenge Pentair’s earnings momentum and put pressure on future profit margins.

Find out about the key risks to this Pentair narrative.

Another View: Is Pentair Really a Bargain?

Looking at Pentair from a different angle, the company's valuation based on its price-to-earnings ratio makes it look expensive compared to the broader US Machinery industry. This perspective raises questions about conventional wisdom and challenges the idea that the stock remains a clear value play. Could the market be pricing in more risk or future headwinds?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Pentair to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Pentair Narrative

If you see things differently or want to dig into the fundamentals on your own terms, you can shape your own narrative in just minutes. Do it your way.

A good starting point is our analysis highlighting 1 key reward investors are optimistic about regarding Pentair.

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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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