How to Play Pentair Stock Ahead of Earnings Later This Month

PNR looks best suited for long-term investors looking to preserve wealth

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The shares of Pentair plc (NYSE:PNR) are flat today, last seen trading at $53.19, after yesterday receiving a price-target cut at Morgan Stanley to $51 from $55. The company will step into the earnings confessional to report first-quarter earnings before the open on Thursday, April 21. Below, we will take a look at PNR's recent performance on the charts, and how the equity has typically performed post-earnings.

Digging deeper, Pentair stock has been chopping lower on the charts since November, when it came close to conquering its Aug. 16, all-time high of $80.40. More recently, the security slipped below a floor at the $53 area, while struggling with long-term overhead pressure from the 40-day moving average. Year-to-date, PNR is already down 27.1%.

PNR 40 Day

Sentiment among short-term options traders has been incredibly put-heavy. This is per PNR's Schaeffer's put/call volume ratio (SOIR) of 0.95, which ranks higher than 91% of readings from the past year. 

As far as earnings are concerned, Pentair stock has a mostly dismal history of next-day reactions, finishing five of eight sessions lower in the past two years, including an 3.5% dip in October.

From a fundamental point of view, the water treatment name has an average valuation, considering its slow and steady growth rate. Pentair stock now trades at a forward price-earnings ratio of 14.51, and a price-sales ratio of 2.44. In addition, PNR is estimated to grow earnings by 10%, and revenues by 7.3% in 2022, as well as increase earnings by 7.3%, and revenues by 4% for 2023.

Nonetheless, Pentair has managed to increase revenues and net income by 27% and 59%, respectively, since 2018. PNR offers a dividend yield of 1.58%, with a forward dividend of $0.84, making the security best suited for long-term investors primarily looking to preserve wealth.

 

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