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On Tuesday, JPMorgan reiterated its neutral rating on the stock. Pentair (NYSE:) is a company traded on the New York Stock Exchange under the ticker NYSE:PNR. The company's analysis follows Pentair's recent 2024 first-quarter and full-year guidance affirmed at its investor day.
Pentair has a large portion of its business in the pool industry, with stable demand and no changes in the short term. The company operates on a reserve-and-ship model, with half of the proceeds going to Poole (NASDAQ:) Corp.
This consistency is in line with expectations, and while no rate hikes are expected in the second half of the year, the potential for lower rates could lead to an upside to guidance. The company is also working on clearing inventory, and he predicts another quarter of tough comparisons due to inventory build-up in the first quarter of 2023.
Consumer resilience is noted despite persistent inflation, with the number of new pool installations expected to decline slightly in 2024, to 65,000-67,000 compared to around 70,000 in 2023. It is predicted that pool segment, and the net realization rate is expected to be approximately 2%.
On the pumping side, the performance of well pumps is at a low level, which correlates with the slowdown in the growth of rural housing development. The company expects sales to be weak in the first half of this year, but to recover slightly in the second half.
At Manitowoc, tough comparisons are putting some pressure on the top line, but Everpure offers more alternatives, so we expect upside. Large-scale industrial business is performing well, supported by the government's continued economic stimulus measures.
The agricultural sector has not met expectations and the market is unlikely to recover by the end of the year. In the non-residential sector, data centers, senior housing, and warehouses are performing well, while certain industries such as offices and apartments are slowing.
Pentair's management emphasized that the secondary market is also recovering as the manufacturing industry returns. They are optimistic about expanding into growing end markets and finding new expansion opportunities.
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