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On Friday, Loop Capital Markets adjusted its outlook on Pool Corp (NASDAQ:POOL), a leading wholesale distributor of swimming pool supplies, equipment, and related leisure products. Analyst Garik Shmois reduced the company’s price target, bringing it down to $315 from the previous $330, while continuing to recommend a Hold rating on the stock. According to InvestingPro data, analyst targets for POOL currently range from $280 to $400, with the stock trading near $289, close to its 52-week low.
The adjustment comes after Pool Corp disclosed a weaker than expected performance for the first quarter of 2025. The company’s earnings per share (EPS) fell short of consensus estimates, attributed to lower sales and gross margin figures, although this was somewhat mitigated by reduced selling, general and administrative (SG&A) expenses.
Pool Corp’s management highlighted the impact of adverse weather conditions in January and February, which was somewhat alleviated by an improvement in March. However, the sectors of new pool construction and repair and remodel (R&R) market reported softness during the quarter. These areas are expected to continue facing headwinds due to persistent concerns over consumer confidence and affordability.
Despite the quarterly miss, Pool Corp has chosen to maintain its full-year guidance. Nonetheless, there is a sentiment among investors that a future guidance reduction may be on the horizon. This is due to anticipated weaker demand for large ticket items, a negative sales mix, and increased pricing pressures that could potentially undermine the benefits of new equipment price hikes. InvestingPro analysis reveals several key insights, including 4 analysts revising earnings downward for the upcoming period. However, the company maintains strong fundamentals with 14 consecutive years of dividend increases and liquid assets exceeding short-term obligations. For deeper insights into POOL’s valuation and 8 additional ProTips, subscribers can access the comprehensive Pro Research Report.
Loop Capital’s analysis points to limited visibility regarding an improvement in the macroeconomic environment and stabilization in demand for large ticket items, which are key factors influencing market sentiment. The revised price target reflects these ongoing challenges faced by Pool Corp.
In other recent news, Pool Corporation announced its Q1 2025 earnings, which fell short of analyst expectations. The company reported an earnings per share (EPS) of $1.32, missing the forecasted $1.48. Revenue was in line with expectations at $1.1 billion, though it represented a 4% decline compared to the previous year. Despite the revenue meeting expectations, the earnings miss was notable, reflecting challenges in the current economic climate. The company continues to face macroeconomic pressures, particularly affecting new pool construction, although its maintenance and repair segments remain stable.
Additionally, Pool Corporation has maintained its full-year EPS guidance range of $11.1 to $11.6, with expectations of a 2% pricing benefit. Analysts from firms such as William Blair and Wells Fargo (NYSE:WFC) have engaged with the company to understand the impacts of tariffs and regional variations on pricing strategies. Despite these challenges, the company is optimistic about potential improvements in discretionary spending later in the year. Pool Corporation’s CEO, Peter Arvan, emphasized the resilience of the pool market, while CFO Melanie Hart highlighted the company’s ability to manage business profitably in various market conditions.
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