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Let's talk about the popular Pentair plc (NYSE:PNR). The company's shares saw significant share price movement during recent months on the NYSE, rising to highs of US$109 and falling to the lows of US$85.19. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Pentair's current trading price of US$86.06 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Pentair’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Pentair
What Is Pentair Worth?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 6.4% below our intrinsic value, which means if you buy Pentair today, you’d be paying a fair price for it. And if you believe that the stock is really worth $91.98, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Pentair’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will Pentair generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 45% over the next couple of years, the future seems bright for Pentair. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? PNR’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on PNR, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.