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PNR — Pentair

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 22.69%
Profit Margins 15.97%
Return on Equity 17.61%
Return on Assets 8.88%
Free Float 0.16B
Dividend Yield 1.39%
Short Int % Utilisation 4.84%

2.2 Growth

Metric Value
Revenue Growth 2.6%
Free Cash Flow 0.57B
EBITDA 12.31 (Ratio)
Enterprise Value 13.55B
EV/Revenue 3.23
EV/EBITDA 12.31

Revenue growth of 2.6% suggests mature or challenged top-line momentum.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* -32.84%
Risk / Std Dev (Ann.)* 32.64%
1-Year Price Return* -36.21%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $66.16
52-Week Range $57.60 – $113.95
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in US$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue $4.18B $4.08B
Net income Reported net income $653.80M $625.40M
Total assets Year-end reported balance $6.87B $6.45B
Shareholders’ equity Year-end reported balance $3.87B $3.56B
Net margin Net income ÷ revenue 15.66% 15.32%
Asset turnover Revenue ÷ total assets 0.6080x 0.6333x
Equity multiplier Total assets ÷ shareholders’ equity 1.7753x 1.8093x
ROE Net margin × asset turnover × equity multiplier 16.90% 17.55%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $4.18B
Prior annual revenue $4.08B
EBIT $825.90M
Tax rate 14.14%
NOPAT = EBIT × (1 − tax rate) $709.08M
Forecast start-growth basis 2.28%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $709.08M
Add: depreciation & amortisation $117.70M
Less: capital expenditure -$68.80M
Less/(add): working-capital cash-flow movement -$55.80M
Current unlevered FCFF $702.18M

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 2.28% $725.27M $120.39M -$70.37M -$57.07M $718.21M $686.81M
2 2.34% $742.22M $123.20M -$84.81M -$58.41M $722.20M $631.54M
3 2.39% $759.97M $126.15M -$99.94M -$59.80M $726.37M $580.85M
4 2.45% $778.56M $129.23M -$115.81M -$61.27M $730.71M $534.34M
5 2.50% $798.02M $132.46M -$132.46M -$62.80M $735.22M $491.64M

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 1.03
Cost of equity 10.38%
Pre-tax cost of debt 3.93%
WACC 9.35%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $10.99B
Implied terminal EV / EBITDA 10.35x
Terminal value as % of enterprise value 70.62%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $2.93B
Present value of terminal value $7.03B
Indicated enterprise value $9.96B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $9.96B
Less: gross interest-bearing debt $1.77B
Add: cash and equivalents $101.60M
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value $8.29B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 165,500,000.00
Share-count basis reported diluted weighted-average shares
Current market price $63.93
DCF indicative value per share $50.10
Indicative value vs. market price -21.64%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% within review band

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 4/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:46:11.124091 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha -47.36% -36.64%
Adjusted R² 0.31 0.39
Annualised residual volatility 23.57% 22.09%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) 1.04 (7.49) 1.43 (9.59)
Size (SMB) 0.66 (3.53) 0.68 (3.56)
Value (HML) 0.32 (1.99) -0.08 (-0.42)
Profitability (RMW) NM 0.68 (4.31)
Investment (CMA) NM 0.62 (2.27)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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