{"schemaVersion":1,"research":true,"symbol":"pnr","name":"PENTAIR plc","topic":"moat","path":"/stock/pnr/moat","status":"stale","version":7,"updatedAt":"2026-10-19T16:27:52.086Z","locked":false,"publicFairValue":false,"fairValue":null,"moat":{"verdict":"uncertain","summary":"Pentair demonstrates realized pricing ability, but the passages do not establish a durable structural moat. Brands, distribution and the Pool installed base are plausible advantages supported principally by issuer assertions. The unexpectedly severe 2026 Pool inventory correction exposes channel and execution vulnerability without establishing lasting competitive displacement. Pricing and operating improvements support commercial strength, but do not prove customer lock-in or superior economics versus competitors.","advantages":[{"mechanism":"intangible_assets","claim":"Potential brand, technology and distribution advantages in Pool and Water Solutions remain unproven as durable barriers. Implemented price increases demonstrate current commercial discretion, but cannot establish that these assets caused the pricing outcomes.","durability":"Unestablished. The catalog lacks demonstrated brand premiums, comparative market-share persistence, proprietary replacement dependence or evidence that the installed base prevents substitution.","risks":"Price competition, alternative distribution channels and customer concentration could weaken the claimed advantage. Pool channel destocking is realized vulnerability; management's expected recovery remains prospective.","invalidation":"The candidate advantage would be undermined by sustained share losses, major distributor defections or repeated price concessions after channel inventories normalize. Evidence of persistent replacement demand, price premiums and stable competitive share would strengthen it.","competitors":[],"evidenceIds":["e1","e2","e3","e4"],"counterEvidenceIds":["e5","e6","e7","e8"]}],"evidence":[{"id":"e1","sourceId":"filing-1","location":"Business — Water Solutions competition; claimed distribution and reputation advantage","excerpt":"We believe our distribution channels and reputation for quality also provide us a competitive advantage."},{"id":"e2","sourceId":"filing-8","location":"July 14 release — CEO claims concerning Pool brand, installed base and technology","excerpt":"Our Pool business is an industry leader with a premier brand, strong customer base, and a large install base, with leading positions in energy-efficient and smart connected pool technologies."},{"id":"e3","sourceId":"filing-1","location":"MD&A — 2024 and 2025 price, volume and sales-growth components","excerpt":"= Not Meaningful Net sales The components of the consolidated net sales change were as follows: 2025 vs 2024 2024 vs 2023 Volume (2.1) % (2.3) % Price 4.0 1.9 Core growth 1.9 (0.4) Acquisition/Divestiture (0.1) (0.1) Currency 0.5 — Total 2.3 % (0.5) % The 2.3 percent increase in consolidated net sales in 2025 from 2024 was primarily the result of: •increased selling prices across all of our segments to mitigate inflationary cost increases; •favorable foreign currency effects compared to the prior year; and •increased sales volume within our Pool segment due to higher demand compared to the prior year."},{"id":"e4","sourceId":"filing-2","location":"MD&A — second-quarter and first-half 2026 price, volume and channel destocking","excerpt":"Other expense 0.7 1.5 (0.8) (53.3) % Net interest expense 39.5 37.6 1.9 5.1 % Income from continuing operations before income taxes 336.3 355.4 (19.1) (5.4) % Provision for income taxes 46.9 52.0 (5.1) (9.8) % Effective tax rate 13.9 % 14.6 % (0.7) pts Net sales The components of the consolidated net sales change from the prior period were as follows: Three months ended June 30, 2026 Six months ended June 30, 2026 over the prior year period over the prior year period Volume (20.6) % (12.8) % Price 3.3 4.2 Core growth (17.3) (8.6) Acquisition/Divestitures (0.3) (0.4) Currency 0.6 1.3 Total (17.0) % (7.7) % The 17.0 and 7.7 percent decreases in net sales in the second quarter and first half, respectively, of 2026 from 2025 were primarily driven by: •decreased sales volume primarily driven by destocking of channel inventory within our Pool segment; and •a business exit in the commercial business of our Water Solutions segment that occurred during the second quarter of 2025."},{"id":"e5","sourceId":"filing-1","location":"Risk factors — competition on price and local relationships in less technical applications","excerpt":"Some of our competitors attempt to compete based primarily on price, localized expertise and local relationships, especially with respect to products and applications that do not require a great deal of engineering or technical expertise."},{"id":"e6","sourceId":"filing-1","location":"Risk factors — intellectual property may not prevent similar competing products","excerpt":"Intellectual property protections, however, may not preclude competitors from developing products like ours, or from challenging our names or products."},{"id":"e7","sourceId":"filing-1","location":"Business — Pool customer concentration in 2025 and 2024","excerpt":"One customer in the Pool business represented approximately 18% and 15% of our consolidated net sales in 2025 and 2024, respectively."},{"id":"e8","sourceId":"filing-7","location":"Second-quarter release — greater-than-estimated channel correction and worsening conditions","excerpt":"Second quarter Pool performance was impacted by a decline in Pool sales largely attributed to a more pronounced inventory realignment with major channel partners than previously estimated and worsening business conditions, including higher interest rates and inflation."},{"id":"e9","sourceId":"filing-1","location":"MD&A — 2023–2025 consolidated sales, gross margins and operating results","excerpt":"27 CONSOLIDATED RESULTS OF OPERATIONS The consolidated results of operations were as follows: Years ended December 31 % / point change In millions 2025 2024 2023 2025 vs 2024 2024 vs 2023 Net sales $ 4,176.0 $ 4,082.8 $ 4,104.5 2.3 % (0.5) % Cost of goods sold 2,485.7 2,484.0 2,585.3 0.1 % (3.9) % Gross profit 1,690.3 1,598.8 1,519.2 5.7 % 5.2 % % of net sales 40.5 % 39.2 % 37.0 % 1.3 pts 2.2 pts Selling, general and administrative 736.9 701.4 680.2 5.1 % 3.1 % % of net sales 17.6 % 17.2 % 16.6 % 0.4 pts 0.6 pts Research and development 95.9 93.6 99.8 2.5 % (6.2) % % of net sales 2.3 % 2.3 % 2.4 % — pts (0.1) pts Operating income 857.5 803.8 739.2 6.7 % 8.7 % % of net sales 20.5 % 19.7 % 18.0 % 0.8 pts 1.7 pts Loss on sale of business 26.3 — — N.M."},{"id":"e10","sourceId":"filing-2","location":"MD&A — first-half 2026 gross margin and operating-income deterioration","excerpt":"= Not Meaningful 26 Table of Contents The consolidated results of operations for the six months ended June 30, 2026 and 2025 were as follows: Six months ended In millions June 30, 2026 June 30, 2025 $ Change % / Point Change Net sales $ 1,969.3 $ 2,133.5 $ (164.2) (7.7) % Cost of goods sold 1,140.9 1,273.6 (132.7) (10.4) % Gross profit 828.4 859.9 (31.5) (3.7) % % of net sales 42.1 % 40.3 % 1.8 pts Selling, general and administrative 403.7 390.4 13.3 3.4 % % of net sales 20.5 % 18.3 % 2.2 pts Research and development 48.2 48.7 (0.5) (1.0) % % of net sales 2.4 % 2.3 % 0.1 pts Operating income 376.5 420.8 (44.3) (10.5) % % of net sales 19.1 % 19.7 % (0.6) pts Loss on sale of business — 26.3 (26.3) N.M."},{"id":"e11","sourceId":"filing-2","location":"MD&A — pricing, productivity and $11.2 million tariff-refund contribution","excerpt":"These decreases were partially offset by: •increased selling prices to mitigate impacts of inflation; •increased productivity; and •the positive impact of $11.2 million in refunds during the second quarter of 2026 associated with tariffs previously collected under IEEPA which partially mitigated inflationary costs increases."},{"id":"e12","sourceId":"filing-2","location":"Liquidity and capital resources — early-buy discounts and extended payment terms","excerpt":"The magnitude of the sales spike has historically been partially mitigated within the Pool segment by employing advance sale “early buy” programs (generally including extended payment terms and/or additional discounts)."},{"id":"e13","sourceId":"filing-1","location":"Liquidity — 2023–2025 operating cash flow and capital expenditures","excerpt":"The following table is a reconciliation of free cash flow: Years ended December 31 In millions 2025 2024 2023 Net cash provided by operating activities of continuing operations $ 814.8 $ 766.9 $ 620.8 Capital expenditures of continuing operations (68.8) (74.4) (76.0) Proceeds from sale of property and equipment of continuing operations 2.4 0.6 5.6 Free cash flow from continuing operations $ 748.4 $ 693.1 $ 550.4 Net cash used for operating activities of discontinued operations — (0.2) (1.6) Free cash flow $ 748.4 $ 692.9 $ 548.8 Debt and Capital Pentair, Pentair Finance S.à r.l (“PFSA“) and Pentair, Inc."},{"id":"e14","sourceId":"filing-1","location":"Financial-statement notes — debt and customer-relationship impairment","excerpt":"The recorded amounts and estimated fair values of total debt, excluding unamortized issuance costs and discounts, at December 31 were as follows: 2025 2024 In millions Recorded Amount Fair Value Recorded Amount Fair Value Variable rate debt $ 852.7 $ 852.7 $ 843.8 $ 843.8 Fixed rate debt 800.0 828.2 819.3 814.3 Total debt $ 1,652.7 $ 1,680.9 $ 1,663.1 $ 1,658.1 Financial assets and liabilities measured at fair value on a recurring and nonrecurring basis were as follows: December 31, 2025 In millions Level 1 Level 2 Level 3 NAV Total Recurring fair value measurements Interest rate contract liabilities $ — $ (0.2) $ — $ — $ (0.2) Foreign currency contract liabilities — (68.8) — — (68.8) Deferred compensation plan assets 32.3 — — — 32.3 Contingent earn-out liabilities — — (8.0) — (8.0) Total recurring fair value measurements $ 32.3 $ (69.0) $ (8.0) $ — $ (44.7) Nonrecurring fair value measurements (1) 1) During the year ended December 31, 2025, we recorded an impairment charge on a definite-lived customer relationship intangible asset of $30.9 million."},{"id":"e15","sourceId":"filing-1","location":"Business — completed Hydra-Stop acquisition and cash consideration","excerpt":"On September 17, 2025, as part of our Flow reportable segment, we completed the acquisition of Hydra-Stop, LLC (“Hydra-Stop”) for $292.1 million in cash, net of cash acquired, and subject to customary adjustments."},{"id":"e16","sourceId":"filing-2","location":"Subsequent events — July 27 definitive Taco acquisition agreement","excerpt":"16. Subsequent Events\nOn July 27, 2026, as part of our Water Solutions reportable segment, we entered into a definitive agreement to acquire the issued and outstanding equity securities of Taco Group Holdings (“Taco”), for a purchase price of $1.425 billion, subject to customary adjustments contemplated by the definitive agreement."},{"id":"e17","sourceId":"filing-2","location":"Subsequent events — committed acquisition bridge financing","excerpt":"In connection with entering into the definitive agreement to acquire Taco, PFSA entered into a commitment letter, dated July 27, 2026 (the “Commitment Letter”), pursuant to which, among other things, the lender has committed to provide debt financing for the acquisition of Taco, consisting of a senior unsecured bridge facility of $1.4 billion (the “Bridge Facility”), on the terms and subject to the conditions set forth in the Commitment Letter."},{"id":"e18","sourceId":"filing-2","location":"Statement of changes in equity — first-half 2026 repurchases, issuance and share count","excerpt":"5 Table of Contents Pentair plc and Subsidiaries Condensed Consolidated Statements of Changes in Equity (Unaudited) In millions Ordinary shares Additional paid-in capital Retained earnings Accumulated other comprehensive (loss) income Total Number Amount Balance - December 31, 2025 163.2 $ 1.7 $ 1,313.1 $ 2,822.6 $ (268.2) $ 3,869.2 Net income — — — 172.4 — 172.4 Other comprehensive income, net of tax — — — — 6.6 6.6 Dividends declared, $0.27 per share — — — (43.6) — (43.6) Share repurchases (2.0) — (200.0) — — (200.0) Exercise of options, net of shares tendered for payment — — 1.1 — — 1.1 Issuance of restricted shares, net of cancellations 0.5 — — — — — Shares surrendered by employees to pay taxes (0.1) — (11.3) — — (11.3) Share-based compensation — — 15.7 — — 15.7 Balance - March 31, 2026 161.6 $ 1.7 $ 1,118.6 $ 2,951.4 $ (261.6) $ 3,810.1 Net income — — — 128.6 — 128.6 Other comprehensive loss, net of tax — — — — (1.4) (1.4) Dividends declared, $0.27 per share — — — (43.1) — (43.1) Share repurchases (2.0) (0.1) (149.9) — — (150.0) Exercise of options, net of shares tendered for payment 0.1 — 1.6 — — 1.6 Issuance of restricted shares, net of cancellations (0.1) — — — — — Shares surrendered by employees to pay taxes — — (0.3) — — (0.3) Share-based compensation — — 3.8 — — 3.8 Balance - June 30, 2026 159.6 $ 1.6 $ 973.8 $ 3,036.9 $ (263.0) $ 3,749.3 In millions Ordinary shares Additional paid-in capital Retained earnings Accumulated other comprehensive (loss) income Total Number Amount Balance - December 31, 2024 164.8 $ 1.7 $ 1,501.7 $ 2,336.1 $ (276.6) $ 3,562.9 Net income — — — 154.9 — 154.9 Other comprehensive income, net of tax — — — — 3.0 3.0 Dividends declared, $0.25 per share — — — (41.2) — (41.2) Share repurchases (0.6) — (50.0) — — (50.0) Exercise of options, net of shares tendered for payment — — 0.6 — — 0.6 Issuance of restricted shares, net of cancellations 0.4 — — — — — Shares surrendered by employees to pay taxes (0.1) — (9.2) — — (9.2) Share-based compensation — — 12.6 — — 12.6 Balance - March 31, 2025 164.5 $ 1.7 $ 1,455.7 $ 2,449.8 $ (273.6) $ 3,633.6 Net income — — — 148.5 — 148.5 Other comprehensive loss, net of tax — — — — (0.5) (0.5) Dividends declared, $0.25 per share — — — (41.0) — (41.0) Share repurchases (0.7) — (75.0) — — (75.0) Exercise of options, net of shares tendered for payment 0.2 — (1.7) — — (1.7) Issuance of restricted shares, net of cancellations (0.1) — — — — — Shares surrendered by employees to pay taxes — — (0.3) — — (0.3) Share-based compensation — — 8.6 — — 8.6 Balance - June 30, 2025 163.9 $ 1.7 $ 1,387.3 $ 2,557.3 $ (274.1) $ 3,672.2 See accompanying notes to condensed consolidated financial statements."},{"id":"e19","sourceId":"filing-7","location":"Release financial tables — first-half cash flows, capital spending and financing","excerpt":"Equity income of unconsolidated subsidiaries\n(1.0)\n(0.4)\nDepreciation\n29.4 \n29.4 \nAmortization\n31.4 \n28.5 \nDeferred income taxes\n(2.1)\n18.5 \nLoss on sale of business\n— \n26.3 \nShare-based compensation\n19.5 \n21.2 \nAsset impairment and write-offs\n— \n47.0 \nChanges in assets and liabilities, net of effects of business acquisitions\nAccounts receivable\n187.0 \n33.4 \nInventories\n(36.7)\n(9.9)\nOther current assets\n(23.9)\n(27.3)\nAccounts payable\n18.3 \n39.4 \nEmployee compensation and benefits\n(22.9)\n(18.9)\nOther current liabilities\n16.2 \n66.6 \nOther non-current assets and liabilities\n(0.2)\n10.5 \nNet cash provided by operating activities\n504.4 \n567.7 \nInvesting activities\nCapital expenditures\n(37.4)\n(27.7)\nPurchase of investments\n— \n(18.0)\nProceeds from sale of property and equipment\n0.2 \n0.1 \nOther\n(1.5)\n0.2 \nNet cash used for investing activities\n(38.7)\n(45.4)\nFinancing activities\nNet repayments of short-term borrowings\n— \n(9.2)\nNet borrowings of revolving long-term debt\n42.3 \n9.9 \nProceeds from long-term debt\n500.0 \n— \nRepayments of long-term debt\n(575.0)\n(250.0)\nDebt issuance costs\n(1.2)\n(2.1)\nPayment of contingent consideration\n(3.6)\n— \nShares issued to employees, net of shares withheld\n(8.9)\n(10.6)\nRepurchases of ordinary shares\n(348.2)\n(125.0)\nDividends paid\n(87.5)\n(82.4)\nNet cash used for financing activities\n(482.1)\n(469.4)\nEffect of exchange rate changes on cash and cash equivalents\n6.6 \n(28.6)\nChange in cash and cash equivalents\n(9.8)\n24.3 \nCash and cash equivalents, beginning of period\n101.6 \n118.7 \nCash and cash equivalents, end of period\n$\n91.8 \n$\n143.0 \n(more)\n7\nPentair plc and Subsidiaries\nReconciliation of the GAAP Operating Activities Cash Flow to the Non-GAAP Free Cash Flow (Unaudited)\n \nThree months ended\nThree months ended\nSix months ended\nIn millions\nMarch 31,\n2026\nJune 30,\n2026\nJune 30,\n2026\nNet cash (used for) provided by operating activities\n$\n(67.4)\n$\n571.8 \n$\n504.4 \nCapital expenditures\n(18.5)\n(18.9)\n(37.4)\nProceeds from sale of property and equipment\n0.2 \n— \n0.2 \nFree cash flow\n$\n(85.7)\n$\n552.9 \n$\n467.2 \n \nThree months ended\nThree months ended\nSix months ended\nIn millions\nMarch 31,\n2025\nJune 30,\n2025\nJune 30,\n2025\nNet cash (used for) provided by operating activities\n$\n(38.9)\n$\n606.6 \n$\n567.7 \nCapital expenditures\n(16.8)\n(10.9)\n(27.7)\nProceeds from sale of property and equipment\n— \n0.1 \n0.1 \nFree cash flow\n$\n(55.7)\n$\n595.8 \n$\n540.1 \n(more)\n8\nPentair plc and Subsidiaries\nSupplemental Financial Information by Reportable Segment (Unaudited)\n2026\n2025\nIn millions\nFirst\nQuarter\nSecond\nQuarter\nSix\nMonths\nFirst\nQuarter\nSecond\nQuarter\nSix\nMonths"},{"id":"e20","sourceId":"filing-3","location":"Compensation discussion — approved 2025 CEO long-term incentive mix","excerpt":"Long-Term Incentives For 2025, the Compensation Committee approved a mix of long-term incentive awards for the CEO of performance share units at 75% and stock options at 25% of the long-term award value to provide a heightened emphasis for our CEO on compensation elements that are contingent on performance goals and increases in our share price."},{"id":"e21","sourceId":"filing-3","location":"Summary compensation table notes — actual 2025 CEO performance-unit grant value","excerpt":"Stauch — $5,100,019; Mr. Fishman — $924,985; Mr."},{"id":"e22","sourceId":"filing-3","location":"Compensation discussion — annual incentive metrics and weights","excerpt":"Company-wide (Stauch and Fishman) Pentair Adjusted Operating Income (50% weight) + Pentair Revenue (30% weight) + Pentair Cash Flow (20% weight) (0-200%)* x Target Award Amount ($) x Sustainability Modifier (+/- 10%) = Annual Incentive Award Pool (Pedretti) Pool Income (40% weight) + Pool Revenue (20% weight) + Pentair Free Cash Flow (20% weight) + Pentair Adjusted Operating Income (20% weight) (0-200%)* x Target Award Amount ($) x Sustainability Modifier (+/- 10%) = Annual Incentive Award Flow (Wiggins) Flow Income (40% weight) + Flow Revenue (20% weight) + Pentair Free Cash Flow (20% weight) + Pentair Adjusted Operating Income (20% weight) (0-200%)* x Target Award Amount ($) x Sustainability Modifier (+/- 10%) = Annual Incentive Award 42 Pentair | 2026 Proxy Statement Compensation Discussion and Analysis Water Solutions (Chiu) Water Solutions Income (40% weight) + Water Solutions Revenue (20% weight) + Pentair Free Cash Flow (20% weight) + Pentair Adjusted Operating Income (20% weight) (0-200%)* x Target Award Amount ($) x Sustainability Modifier (+/- 10%) = Annual Incentive Award * For each measure, threshold performance is required for any payout; payouts begin at 50% of target."},{"id":"e23","sourceId":"filing-3","location":"Shareholder engagement — implemented clawback expansion and other responses","excerpt":"In response to shareholder engagement during 2025, the Board took the following actions: uProvided additional disclosure about the Board’s oversight of emerging risks, including Artificial Intelligence (AI) (see page 23 for more information) uAdded a director skills matrix (see page 11 for more information) uExpanded our Clawback Policy to include cancellation or recoupment of time-vesting and performance-vesting equity awards in certain circumstances (see page 54 for more information) uProvided additional disclosure addressing the sustainability modifier to our MIP (see page 48 for more information) Say-on-Pay Shareholder support of our executive compensation program was reflected in our 2025 say-on-pay vote with 83.6% of votes cast in favor of our proposal."},{"id":"e24","sourceId":"filing-3","location":"Incentive plans — change-in-control acceleration and deemed performance","excerpt":"Change in Control and Termination Provisions of Incentive Plans Change in Control Provisions The 2020 Plan and the most recent predecessor plan provide that, upon a change in control, unless an agreement between us and the executive provides for a more favorable result to the executive: uall outstanding options, restricted stock and restricted stock units that are not performance awards are immediately vested; uall outstanding performance awards (other than annual incentive awards) vest and are paid in full based on performance at the better of target or trend; and uall outstanding annual incentive awards are paid based on deemed full satisfaction of the performance goals."},{"id":"e25","sourceId":"filing-3","location":"Corporate governance — independent chair and director independence at proxy date","excerpt":"The Board is committed to governance practices that serve our shareholders’ interests The Board is led by an independent Chair of the Board, and all directors, other than our CEO, are independent."},{"id":"e26","sourceId":"filing-3","location":"Corporate governance — independent standing committees","excerpt":"2026 Proxy Statement | Pentair 19 Corporate Governance Committees of the Board The Board has three standing committees comprised solely of independent directors: the Audit and Finance Committee, the Compensation Committee, and the Governance Committee."},{"id":"e27","sourceId":"filing-2","location":"MD&A — Flow results and acquisition, currency, price and volume contributions","excerpt":"28 Table of Contents Flow The net sales and segment income for Flow were as follows: Three months ended Six months ended In millions June 30, 2026 June 30, 2025 % / Point Change June 30, 2026 June 30, 2025 % / Point Change Net sales $ 263.7 $ 250.9 5.1% $ 521.8 $ 483.5 7.9% Segment income 69.8 54.8 27.4% 131.0 105.0 24.8% % of net sales 26.5 % 21.8 % 4.7 pts 25.1 % 21.7 % 3.4 pts Net sales The components of the change in Flow net sales from the prior period were as follows: Three months ended June 30, 2026 Six months ended June 30, 2026 over the prior year period over the prior year period Volume (3.2) % (2.2) % Price 2.4 3.0 Core growth (0.8) 0.8 Acquisition/Divestiture 4.9 4.6 Currency 1.0 2.5 Total 5.1 % 7.9 % The 5.1 and 7.9 percent increases in net sales for Flow in the second quarter and first half, respectively, of 2026 from 2025 were primarily driven by: •increased sales due to the acquisition of Hydra-Stop completed in the third quarter of 2025; •increased selling prices to mitigate inflationary cost increases; and •favorable foreign currency effects."},{"id":"e28","sourceId":"filing-2","location":"Financial-statement notes — restructuring and transformation costs","excerpt":"Restructuring and transformation-related costs included within Cost of goods sold and Selling, general and administrative expense in the Condensed Consolidated Statements of Operations and Comprehensive Income included the following: Three months ended Six months ended In millions June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Restructuring Initiatives Severance and related costs $ 32.9 $ 12.0 $ 46.1 $ 20.3 Other restructuring costs and related adjustments (1) 1.7 3.5 2.2 4.9 Total restructuring costs 34.6 15.5 48.3 25.2 Transformation Program Asset impairment and write-offs — 10.3 — 15.5 Other transformation costs (2) 17.5 12.5 29.0 21.6 Total transformation costs 17.5 22.8 29.0 37.1 Total restructuring and transformation costs $ 52.1 $ 38.3 $ 77.3 $ 62.3 (1) Other restructuring costs and related adjustments primarily consist of certain accruals and related refinements as well as various contract termination costs."},{"id":"e29","sourceId":"filing-7","location":"Second-quarter release — approximately $35 million of tariff refunds","excerpt":"•The Company’s results include approximately $35 million of International Emergency Economic Powers Act (“IEEPA”) refunds"},{"id":"e30","sourceId":"filing-7","location":"Second-quarter release — CEO acknowledges results below expectations","excerpt":"John L. Stauch, Pentair’s President and Chief Executive Officer commented, “As shared in the July 14th preannouncement, our results were below expectations due primarily to a larger-than-anticipated inventory correction in the Pool channel."},{"id":"e31","sourceId":"filing-7","location":"Second-quarter release — prospective channel recovery and inventory-visibility actions","excerpt":"We are confident this is a temporary channel reset rather than a change in the underlying long-term opportunity for the business and are taking swift actions to improve execution, enhance inventory visibility and support healthier order patterns, positioning our Pool business to deliver robust growth in 2027."},{"id":"e32","sourceId":"filing-1","location":"Business — generic Water Solutions competitor coverage","excerpt":"Water Solutions faces numerous domestic and international competitors, some of which have substantially greater resources directed to the vertical markets in which we compete."}],"changes":["Retain the uncertain moat verdict and independently reassess the eight previously graded criteria; their grades remain unchanged.","Give greater weight to the additional releases documenting an unexpectedly severe Pool channel correction and management's acknowledged execution shortfall.","Add first-half 2026 cash-flow deterioration and increased capital spending to the capital-discipline assessment.","Flag the unreconciled difference between tariff-refund amounts in the quarterly MD&A and earnings release."],"limitations":["Only supplied issuer filings and releases were assessed. All supplied source dates have dateKind filed; none is treated as a retrieval or independently established publication date.","Competition passages identify generic competitors without naming rival companies. Pentair brands, acquisition targets and compensation-related companies are not established product competitors.","The catalog does not establish comparative market shares, brand premiums, switching costs, exclusive distribution or a sustained relative cost advantage.","Retention is assessed indirectly from operating demand and channel behavior; neither customer retention rates nor price-driven customer losses are disclosed.","The quarterly MD&A cites $11.2 million of tariff refunds while the release reports approximately $35 million. Their scope is not reconciled in the supplied passages.","Actual incentive grants, governance structures and clawback changes are disclosed, but executive beneficial ownership and subsequent board changes are not established. The March proxy describes governance at its disclosure date.","The Taco transaction is an agreement and financing commitment as of the July filing, not demonstrated completion or realized acquisition returns."],"qualityAssessments":[{"category":"moat","checks":[{"criterion":"structural_advantage","grade":null,"rationale":"Brands, distribution and an installed base are plausible assets, but issuer claims and observed price increases do not establish a structural advantage over competitors.","evidenceIds":["e1","e2","e3","e32"]},{"criterion":"durability","grade":null,"rationale":"The passages do not demonstrate persistent competitive superiority or barriers to replication. Intellectual-property limitations qualify the candidate advantage without proving its absence.","evidenceIds":["e1","e6"]},{"criterion":"customer_dependency","grade":null,"rationale":"An asserted installed base does not demonstrate proprietary replacement dependence or switching friction. Customer concentration establishes Pentair's exposure, not customer dependence on Pentair.","evidenceIds":["e2","e7"]},{"criterion":"erosion_resilience","grade":null,"rationale":"The channel correction demonstrates vulnerability, but the catalog cannot distinguish temporary inventory effects from durable competitive erosion. Management's recovery expectation is unverified.","evidenceIds":["e4","e8","e31"]}]},{"category":"pricing_power","checks":[{"criterion":"realized_pricing","grade":3,"rationale":"Price contributed 1.9% to sales growth in 2024, 4.0% in 2025 and 4.2% in first-half 2026, including 3.3% in the latest quarter. These implemented outcomes demonstrate pricing ability despite weak volumes, principally for inflation mitigation; premium pricing and low elasticity remain unestablished.","evidenceIds":["e3","e4"]},{"criterion":"retention","grade":2,"rationale":"Indirect demand evidence is mixed: Pool demand increased in 2025, while consolidated volumes declined in both annual periods and fell 12.8% in first-half 2026, primarily from Pool destocking. Continuing demand supports assessment, but the correction does not establish customer departures or their cause.","evidenceIds":["e3","e4","e8"]},{"criterion":"margin_resilience","grade":2,"rationale":"Gross and operating margins improved through 2025. First-half 2026 gross margin increased 1.8 points, but operating margin fell 0.6 points and operating income declined 10.5%. Pricing and productivity provided offsets, alongside tariff refunds whose disclosed amounts differ. Resilience is mixed and cannot be attributed solely to pricing.","evidenceIds":["e9","e10","e11","e29"]},{"criterion":"contractual_freedom","grade":2,"rationale":"Implemented price increases and early-buy programs demonstrate practical discretion over prices, discounts and payment terms. Promotional concessions temper that discretion; customer-contract repricing rights and restrictions are not supplied.","evidenceIds":["e3","e4","e12"]}]},{"category":"strong_management","checks":[{"criterion":"capital_discipline","grade":2,"rationale":"Operating cash generation increased through 2025 while capital expenditures declined. First-half 2026 operating cash flow subsequently fell to $504.4 million from $567.7 million and capital expenditures increased to $37.4 million from $27.7 million. Repurchases reduced shares despite issuance. 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