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Pentair (PNR) Acquires Rocean, Expands Water Treatment Solutions

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Zacks Equity Research
·3 min read
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Pentair Plc PNR has completed the acquisition of Be the Change Labs, Inc., d/b/a Rocean in a bid to expand its core water treatment solutions in the residential and commercial water business. Rocean is a leading innovator in smart, sustainable, water solutions. Notably, its smart filtration devices provide countertop filtration solutions and help reduce the usage of single-use plastic water bottles in homes and businesses.  

Pentair is committed to expanding digital transformation, innovation, technology and brand building. In the Water Solutions business, it is investing in innovative components, such as a flat connected valve for water softeners. The company continues to invest in new areas around commercial office water and total water management within its commercial systems business.  Pentair is well poised to gain from these investments over the long term. It is focused on leveraging solid product and technology offerings to help customers deliver smart, sustainable solutions.

Pentair is poised well to benefit from the ongoing strong demand in the residential focused businesses amid the COVID-19 pandemic. Therefore, the company’s Consumer Solutions segment will bank on solid pool demand, given nearly 80% of the segment serves residential markets. The company has raised adjusted earnings per share guidance to the range of $2.35-$2.40 and revenues are expected around $2.95 billion for the current year, backed by its strong pool performance.  

The company is focused on expanding particularly in the areas of pool, residential and commercial water treatment through acquisitions. During the June-end quarter, Pentair acquired an in-floor pool cleaner company that strengthens its product offerings. Previously, the company acquired Aquion, which helps the former expand scope and customer offerings in the residential and commercial water treatment arena. Pentair has also acquired Pelican Water Systems, which provides residential whole home water treatment systems, thus enabling it to meet its consumers’ residential water needs. These investments will drive Pentair’s performance in the near term.

Price Performance

Pentair’s stock has gained 14.6% over the past three months compared with the industry’s growth of 35.6%.

Zacks Rank & Stocks to Consider

Pentair currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector include AGCO Corporation AGCO, Avery Dennison Corporation AVY and Ball Corporation BLL. While AGCO flaunts a Zacks Rank #1 (Strong Buy), Avery Dennison and Ball Corp carry a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

AGCO has an expected earnings growth rate of 15.5% for 2020. The stock has appreciated 42% in three months’ time.

Avery Dennison has an estimated earnings growth rate of 5% for the ongoing year. Shares of the company have gained 23.1% in the past three months.

Ball Corp has a projected earnings growth rate of 16.2% for the current year. Over the past three months, the company’s shares have gained 12.1%.

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