Stock Market News

Pool Corp well positioned but BofA sees downside

2022.12.15 15:58



© Reuters. Pool Corp (POOL) well positioned but BofA sees downside

By Sam Boughedda

BofA initiated coverage of Pool Corp. (NASDAQ:) with an Underperform rating and $291 price target in a note to clients on Thursday.

BofA analysts told investors in a research note that the world’s largest wholesale distributor of pool supplies and distributor of landscaping products is well positioned to gain share in the growing pool market. However, they see downside to consensus EPS estimates driven by weaker end-market demand and near-term margin headwinds.

“POOL’s 2022 revenue guidance is ~95% above 2019 levels, consisting of 30% from inflation, a 6% higher installed base, 18% M&A contribution, a 6% contribution from increased new pool revenues (25%+ higher volume vs. 2019) and a ~35% contribution from higher industry volumes, mix benefits, and share gains,” they wrote.

“In 2023, we expect POOL sales growth to inflect negative and we are 8% below consensus revenue: (1) slowing end market demand, particularly for new pools and remodeling (40% of sales), which we expect to decline ~20%, (2) improving lead times across the industry leading to the reversal of ST share gains & (3) elevated channel inventory levels at a few large dealers,” they added.

In addition, the analysts stated there is near-term margin pressure, but they expect long-term growth.

“Prior to the pandemic, gross margins were fairly consistent at ~29%, but climbed above 32% in 2022. While some of the margin expansion is sticky, we expect a reversion from temporary benefits,” they continued. “With demand normalizing and price increases slowing, we expect gross margins to return to ~30% in 2024. Over the long-term, we expect margins to steadily climb driven by market share gains and outsized growth from the higher margin Porpoise Pool & Patio segment.”

POOL shares declined more than 4% in Thursday’s session.



Source link

Related Articles

Leave a Reply

Back to top button
bitcoin
Bitcoin (BTC) $ 75,960.35 1.57%
vested-xor
Vested XOR (VXOR) $ 3,405.08 99,999.99%
ethereum
Ethereum (ETH) $ 2,919.15 3.31%
tether
Tether (USDT) $ 1.00 0.01%
solana
Solana (SOL) $ 199.59 6.21%
bnb
BNB (BNB) $ 598.77 0.14%
usd-coin
USDC (USDC) $ 0.999999 0.02%
xrp
XRP (XRP) $ 0.549957 1.54%
dogecoin
Dogecoin (DOGE) $ 0.197862 3.03%
staked-ether
Lido Staked Ether (STETH) $ 2,916.94 3.32%
cardano
Cardano (ADA) $ 0.437195 17.63%
tron
TRON (TRX) $ 0.160594 0.78%
wrapped-steth
Wrapped stETH (WSTETH) $ 3,451.04 2.95%
the-open-network
Toncoin (TON) $ 4.88 0.50%
shiba-inu
Shiba Inu (SHIB) $ 0.000019 2.18%
avalanche-2
Avalanche (AVAX) $ 27.48 1.24%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 75,834.32 1.41%
weth
WETH (WETH) $ 2,918.53 3.38%
chainlink
Chainlink (LINK) $ 12.81 3.33%
bitcoin-cash
Bitcoin Cash (BCH) $ 378.79 0.93%
sui
Sui (SUI) $ 2.31 2.53%
polkadot
Polkadot (DOT) $ 4.21 2.03%
leo-token
LEO Token (LEO) $ 6.33 3.40%
usds
USDS (USDS) $ 0.998978 0.61%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,068.89 3.28%
litecoin
Litecoin (LTC) $ 71.40 0.78%
uniswap
Uniswap (UNI) $ 8.86 1.06%
near
NEAR Protocol (NEAR) $ 4.22 0.81%
aptos
Aptos (APT) $ 9.72 1.12%
pepe
Pepe (PEPE) $ 0.000011 5.62%
bittensor
Bittensor (TAO) $ 507.08 3.16%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.42 2.20%
internet-computer
Internet Computer (ICP) $ 7.72 2.33%
dai
Dai (DAI) $ 0.999816 0.06%
monero
Monero (XMR) $ 164.46 1.37%
crypto-com-chain
Cronos (CRO) $ 0.110846 28.89%
stellar
Stellar (XLM) $ 0.101472 3.74%
ethereum-classic
Ethereum Classic (ETC) $ 20.19 0.02%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.17%
kaspa
Kaspa (KAS) $ 0.113617 4.58%
whitebit
WhiteBIT Coin (WBT) $ 19.63 2.06%
aave
Aave (AAVE) $ 181.17 1.09%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.343452 1.00%
blockstack
Stacks (STX) $ 1.66 1.68%
okb
OKB (OKB) $ 40.24 1.22%
first-digital-usd
First Digital USD (FDUSD) $ 0.999417 0.11%
dogwifcoin
dogwifhat (WIF) $ 2.33 0.77%
arbitrum
Arbitrum (ARB) $ 0.573594 0.62%
mantle
Mantle (MNT) $ 0.66289 7.64%
filecoin
Filecoin (FIL) $ 3.73 0.49%