Mizuho Issues Pessimistic Forecast for Watsco (NYSE:WSO) Stock Price

Key Points

• Mizuho lowered Watsco’s price target from $350 to $325 while maintaining a “neutral” rating, implying approximately 7.9% upside from the prior close.
• Analyst sentiment remains cautious: Watsco has a consensus “Hold” rating and an average price target of $373.62, with recent target cuts from Morgan Stanley and DA Davidson.
• Watsco’s latest quarterly results fell short of expectations, reporting $4.00 in EPS versus $4.41 expected and $2.10 billion in revenue versus $2.14 billion estimated, although revenue increased 2.1% year over year.

Watsco (NYSE:WSO - Get Free Report) had its price objective reduced by equities research analysts at Mizuho from $350.00 to $325.00 in a research report issued to clients and investors on Thursday, Benzinga reports. The firm currently has a "neutral" rating on the construction company's stock. Mizuho's price objective points to a potential upside of 7.92% from the company's previous close.

Other research analysts also recently issued reports about the company. Stephens reaffirmed an "overweight" rating and set a $485.00 target price on shares of Watsco in a report on Monday, August 17th. Weiss Ratings downgraded Watsco from a "hold (c)" rating to a "hold (c-)" rating in a research report on Tuesday, October 6th. Morgan Stanley cut their price objective on Watsco from $370.00 to $330.00 and set an "equal weight" rating on the stock in a research note on Monday. DA Davidson cut their price objective on Watsco from $385.00 to $330.00 and set a "neutral" rating on the stock in a research note on Thursday, July 30th. Finally, Robert W. Baird set a $400.00 target price on Watsco in a report on Thursday, July 30th. Two analysts have rated the stock with a Buy rating, seven have given a Hold rating and one has issued a Sell rating to the company. According to MarketBeat.com, Watsco presently has a consensus rating of "Hold" and a consensus price target of $373.62.

Watsco Trading Up 2.1%

WSO traded up $6.06 on Thursday, reaching $301.15. The stock had a trading volume of 192,617 shares, compared to its average volume of 454,045. The company has a market capitalization of $12.42 billion, a price-to-earnings ratio of 26.12 and a beta of 1.06. Watsco has a fifty-two week low of $277.34 and a fifty-two week high of $459.00. The firm has a 50-day moving average of $308.81 and a 200-day moving average of $361.17.

Watsco (NYSE:WSO - Get Free Report) last announced its quarterly earnings results on Wednesday, July 29th. The construction company reported $4.00 EPS for the quarter, missing analysts' consensus estimates of $4.41 by ($0.41). The firm had revenue of $2.10 billion for the quarter, compared to analyst estimates of $2.14 billion. Watsco had a net margin of 6.53% and a return on equity of 14.40%. The business's revenue for the quarter was up 2.1% compared to the same quarter last year. During the same period in the previous year, the business posted $4.52 earnings per share. Sell-side analysts anticipate that Watsco will post 12.22 EPS for the current fiscal year.

Institutional Trading of Watsco

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Markel Group Inc. raised its stake in shares of Watsco by 0.8% in the first quarter. Markel Group Inc. now owns 582,169 shares of the construction company's stock valued at $211,787,000 after buying an additional 4,500 shares during the period. Confluence Investment Management LLC purchased a new position in shares of Watsco in the third quarter worth about $96,991,000. Bank of America Corp DE bought a new stake in shares of Watsco in the second quarter valued at approximately $119,291,000. Caledonia Investments PLC raised its position in shares of Watsco by 12.2% in the third quarter. Caledonia Investments PLC now owns 261,439 shares of the construction company's stock valued at $79,072,000 after purchasing an additional 28,512 shares during the period. Finally, Bank of New York Mellon Corp purchased a new stake in shares of Watsco during the 2nd quarter valued at approximately $97,937,000. 89.71% of the stock is owned by institutional investors.

Watsco Company Profile

Watsco, Inc NYSE: WSO is a distributor of heating, air conditioning and refrigeration equipment and related products. The company supplies residential and commercial contractors with air conditioners, heat pumps, furnaces, refrigeration systems, indoor air-quality products, controls, replacement parts and other installation supplies.

Watsco serves the replacement and new-construction markets through a network of distribution centers, branches, showrooms and e-commerce platforms. Its customers primarily include HVAC and refrigeration contractors, dealers and other industry professionals, while its products are sourced from major manufacturers and distributed under leading industry brands.

Founded in 1956, Watsco has expanded through organic growth and acquisitions to become one of the largest HVAC and refrigeration distributors in North America.

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