Pentair Reiterates Full-Year 2022 Adjusted EPS Guidance After Solid First Quarter

Narrow-moat-rated Pentair delivered solid first-quarter results, with core sales up 12% year over year. Management reiterated its full-year 2022 adjusted EPS guidance range of $3.70 to $3.80, though on higher sales growth of 9% to 11% (up from 6% to 9% previously), which reflects the firm’s strong first-quarter results as well as anticipated further price increases to offset elevated inflation. We’ve lowered our fair value estimate for Pentair to $68 from $70, mostly due to slightly more conservative long-term revenue growth and operating margin assumptions, partially offset by time value of money. We continue to view Pentair as modestly undervalued, with shares currently trading in 4-star territory.