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Pentair plc (PNR) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Pentair plc (PNR)

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Intrinsic Value (DCF)

Current$106.97
→
Intrinsic$105.26
-2%
$68.61$105.26$174.86
Market implies 19% growth for 5 years
PNR appears fairly valued — current price aligns with our DCF estimate.
At $107, the market prices in continued high-teens cash flow growth (19%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $69 → Bull $175. Current price implies expectations near the base case.
Discount ↓Growth →15%17%19%21%
8%$130$142$154$168
10%$89$97$105$114
12%$66$72$78$85
14%$51$56$61$66

Bull Case

  • Bull case ($175) offers 63% upside at 22% growth, 9% discount

Bear Case

  • Bear case ($69) implies 36% downside at 15% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$821.36M
Year 2$974.49M
Year 3$1.16B
Year 4$1.37B
Year 5$1.63B
Terminal$23.95B

📐 Model Inputs

Growth Rate18.6%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$692.30MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is PNR stock undervalued or overvalued?
🟡 FAIRLY VALUED

PNR trades at $106.97, within 10% of our $105.26 intrinsic value estimate. At 10.0% WACC and 18.6% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $66.44 (bear) to $161.88 (bull).

What is PNR's intrinsic value?

Using a 5-year DCF model: Base FCF of $692M, projected at 18.6% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $1.65B net debt and dividing by 0.17B shares: Bear $66.44 | Base $105.26 | Bull $161.88. Current price $106.97 implies +1% to base case.

How is PNR's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 18.6% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($19.24B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 27.8x.