By Sam Boughedda
Pool Corp. (NASDAQ:POOL) was started with an Outperform rating and $408 price target by Oppenheimer analysts in a note to clients Friday.
The analysts said the stock is at a compelling entry point for a long-term growth story.
"We're drawn to Pool Corp .'s long-term growth profile as the leading wholesale distributor in an industry benefiting from migration to warmer climates where there's a higher propensity for pool ownership/continued interest in backyard living features/spending on higher-value technology-enabled pool content," they wrote.
They explained that the growth profile of Pool is primarily driven by recurring revenue via maintenance and minor repair activity on a "perpetually increasing installed base of US pools, and remodeling/retrofitting activity considering the average US pool is ~22 years old."
"We view POOL's trading level, which appears primarily due to excessive focus on reversion to a more normalized new pool construction level, an opportune entry point considering the company's compelling long-term growth story at an attractive operating margin," the analysts concluded.