Pool Corporation: Bouncing Along The Bottom

Pool Corporation delivered solid Q2 results, with EPS of $5.38 and revenue up 2% to $1.8 billion, despite macro headwinds. Maintenance and chemicals segments remain resilient, offsetting muted discretionary spending and a prolonged downturn in new pool construction. POOL reaffirmed full-year adjusted EPS guidance of $10.87-$11.17, supported by disciplined cost control, stable free cash flow, and a strong balance sheet. I maintain a "Hold" rating, viewing shares as fairly valued at 17x-18x earnings, with upside dependent on lower rates to spur construction.

Shares of Pool Corporation (POOL) have been a poor performer over the past year, losing over a third of their value. The current economy, defined by high prices and elevated interest rates, has left many consumers hesitant to undertake large projects, like pool construction.