Buzz Stock of the Day: Pentair (PNR)

Last month, Sterne, Agee & Leach analyst Michael Coleman raised his price target to $23, from $20 for the Minneapolis-based Pentair, Inc. (NYSE: PNR).

Coleman stated in a note to investors that Pentair, which manufactures water treatment and storage systems for customers around the world, “is better positioned than many industrial companies to achieve relative earnings outperformance in 2009 due to significant (and early) restructuring actions taken year-to-date and in (the fourth quarter).” Management expects its cost-cutting measures from workforce reductions alone to produce annual savings of $85 million starting this year, growing to $95 million to $100 million in 2010.

Pentair has a trailing P/E of 8.7, which is below the industry average of 9.1–a possible indication that shares may be undervalued at current levels. The company’s stock outperformed S&P 500 over the last year. Pentair has an operating margin of 11.6 percent, which is in line with several of the company’s competitors’ operating margins. Pentair also pays a dividend, which it has regularly increased for more than three decades. The company’s full-year guidance calls for earnings between $1.70 and $2.00 per share.

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This entry was posted on Tuesday, March 17th, 2009 at 7:50 pm by admin and is filed under Industrial Stocks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.