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Pentair (PNR) to Report Q1 Earnings: What's in the Cards?

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Pentair plc PNR is scheduled to report first-quarter 2021 results on Apr 22, before the opening bell.

Q4 Results & Surprise History

Pentair witnessed improvements in both revenues and earnings in fourth-quarter 2020, primarily owing to the strong demand in the residential focused businesses. The company beat the Zacks Consensus Estimate on both counts.

The company has an impressive earnings surprise history. Pentair beat estimates in each of the trailing four quarters, the average surprise being 21.7%.

Q1 Estimates

The Zacks Consensus Estimate for first-quarter 2021 revenues is pegged at $767 million, indicating year-over-year growth of 8%. The same for earnings stands at 61 cents, suggesting a year-over-year increase of 17.3%. The Zacks Consensus Estimate for the March-end quarter’s earnings has remained unchanged for the past 30 days.

Pentair plc Price and EPS Surprise

Pentair plc Price and EPS Surprise
Pentair plc Price and EPS Surprise

Pentair plc price-eps-surprise | Pentair plc Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Pentair this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Pentair is +2.61%.

Zacks Rank: Pentair currently carries a Zacks Rank of 3.

Key Factors to Note

Pentair continues to witness solid improvement in its residential facing businesses. Increased demand for swimming pools amid the pandemic-induced shelter-in-place restrictions continues to boost demand for Pentair’s equipment. The Consumer Solutions segment, which comprises pool and water solutions businesses, is likely to have seen upbeat pool demand during the January-March quarter.

The company’s efforts to expand in the areas of pool, and residential and commercial water treatment through acquisitions, introduction of water-treatment solutions, investments and innovations are also anticipated to have contributed to the Consumer Solutions segment’s performance during the quarter to be reported.

However, 20% of the Consumer Solutions segment’s revenues is tied to commercial business, which has exposure to restaurants and hospitality. Muted demand due to temporary shutdowns across hospitality and restaurant industries might have weighed on the segment’s quarterly performance. Moreover, material cost inflation is likely to have dented the company’s margins during the March-end quarter.

Pentair’s Industrial & Flow Technologies segment’s first-quarter results are likely to reflect the impact of lower capital spending, and aftermarket sales orders by commercial and industrial customers. The backlog-driven Commercial & Infrastructure Flow business manufactures larger engineered pumps for fire suppression and flood control. This business has been affected by sluggish orders on account of the coronavirus pandemic-related delays.

Pentair has been undergoing certain business-restructuring initiatives aimed at reducing fixed cost structure, which is likely to have aided margin growth during the first quarter. Notably, productivity improvement as well as price hikes in response to inflated material costs are likely to have benefited margins in the quarter to be reported.

Price Performance

Shares of the company have gained 103.6% over the past year compared with the industry’s rally of 131.2%.

Stocks Poised to Beat Earnings Estimates

Here are some Industrial Products stocks, which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Deere & Company DE has an Earnings ESP of +7.02% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Caterpillar Inc. CAT has an Earnings ESP of +3.15% and carries a Zacks Rank #2.

AGCO Corp. AGCO has an Earnings ESP of +4.40% and holds a Zacks Rank of 3.

Zacks Top 10 Stocks for 2021

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Deere & Company (DE) : Free Stock Analysis Report

AGCO Corporation (AGCO) : Free Stock Analysis Report

Caterpillar Inc. (CAT) : Free Stock Analysis Report

Pentair plc (PNR) : Free Stock Analysis Report

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