Pentair shares crashed in early U.S. cash trading after the swimming pool equipment and water treatment systems company slashed its 2026 outlook. Preliminary second-quarter results also missed estimates, while the sudden departure of its CFO raises questions about the company's trajectory and whether the Covid-era pool boom has finally run its course.
Pentair now expects full-year adjusted earnings of $4.60 to $4.80 per share, down from prior estimates of $5.30 to $5.40, and well below the Bloomberg consensus estimate of $5.33.
Preliminary second quarter sales were about $930 million, while adjusted earnings of roughly $1.12 per share missed the $1.47 consensus.
Goldman analysts told clients earlier:
Watching PNR down 18% pre-market – big guide down last night + CFO resigning. This is going to rock a lot of things consumer today – PNR sells equipment into the pool end market. POOL HAYW are the other names people will sell. But broad negative read.
The Covid-era pool boom boosted Pentair's revenues beginning in the second half of 2020, and quarterly revenues have since flatlined around $1 billion.
Here's what other Wall Street analysts are saying (courtesy of Bloomberg):
RBC Capital Markets (sector perform from outperform)
- Analyst Deane Dray downgrades to sector perform after a "negative preannouncement, full year guidance cut, and surprise CFO departure after just four months in the role"
- Says Pool channel destocking is "clearly proving far worse" than previously communicated by management; says lack of visibility of recovery makes it a "show-me story for now"
TD Cowen (sell)
- Analyst Joe Giordano sees a "significant" miss and that "magnitude of the reset highlights questions around market share dynamics and underlying market health into 2027"
- Says announcement suggests "more extreme" underperformance, "sizeable" change in market dynamics, or combination of both
Citi (buy)
- Analyst Andrew Kaplowitz says quarterly revenue miss was "meaningful," flagging company commentary that Pool channel inventory weighed on results
- Say that even with leadership and business changes "we acknowledge that remaining 3Q destocking actions and investor concern around PNR's Pool market share could keep shares pressured in the near-term"
It remains unclear how or when Pentair's pool business will recover. Perhaps lower interest rates and another pandemic-driven home improvement boom are what it will take to revive demand.