Ahead Of The Bell: Pentair

HARTFORD, Conn. (AP) — Demand is stable in most major markets of Pentair Inc., an analyst said Wednesday as he raised his rating on the manufacturer of water storage and treatment systems.

KeyBanc analyst Jeffrey D. Hammond upgraded the Minneapolis company to "Buy" from "Hold" and established a $37 12-month price target.

Potential in Pentair's water business is "still largely untapped," Hammond said in a client note. But he said the segment's margins are strong and demand appears stable in most major markets, including technical products.

Pentair's water business includes flow technology, filtration, swimming pool construction and spa equipment.

Its technical products business designs and manufactures products and accessories to house and protect electronics and electrical components.

Baird analyst Michael A. Schneider said in a client note that Pentair's water business is at a point where volumes are "poised to turn positive" in the first quarter of 2010, with "margins impressively over 12 percent already."

"Pentair's execution must be applauded as it sets the stage for 30 percent compound earnings growth," he said.