The Manchester, U.K.-based industrial company manufacturers valves, fluid controls, pumps, filtration products, electrical enclosures and heat tracing equipment.
The firm favors Pentair's portfolio, excellent free cash flow, long-term earnings growth rate and new goals, which include a 9% to 11% earnings per share growth target.
However, "30% of sales are from the commodities processing markets, and the decrementals in valves and controls (V&C), which house most of this exposure, give us pause. Moreover, PNR's historical core sales growth has been only 1% despite its many market-leading businesses," BMO wrote in a note.
The firm needs to see progress on the company's footprint shrink, a more stable top line and some debt reduction.
Shares of Pentair closed down by 3.33% to $51.36 on Tuesday on heavy trading volume.
About 1.62 million of the company's shares changed hands today vs. its average 30-day volume of 1.25 million shares per day.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.
The primary factors that have impacted our rating are mixed.
The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures.
The team also finds weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: PNR