Zacks Research Issues Positive Estimate for Watsco Earnings

Key Points

• Zacks Research raised its Q2 2028 EPS estimate for Watsco to $5.09 from $5.06, while projecting fiscal 2028 EPS of $15.15. Despite the modest increase, Zacks maintains a “Strong Sell” rating.
• Watsco’s latest quarterly results fell short of expectations, with EPS of $4.00 versus the $4.41 consensus and revenue of $2.10 billion versus $2.14 billion expected. Revenue still increased 2.1% year over year.
• Shares opened at $320.08, near the lower end of their 52-week range, while analysts’ consensus rating is “Hold” with an average price target of $395.50. The company also pays a $3.30 quarterly dividend, equivalent to a 4.1% yield.

Watsco, Inc. (NYSE:WSO - Free Report) - Stock analysts at Zacks Research increased their Q2 2028 earnings per share estimates for Watsco in a research report issued to clients and investors on Wednesday, September 23rd. Zacks Research analyst Team now expects that the construction company will post earnings per share of $5.09 for the quarter, up from their prior forecast of $5.06. Zacks Research has a "Strong Sell" rating on the stock. The consensus estimate for Watsco's current full-year earnings is $12.21 per share. Zacks Research also issued estimates for Watsco's FY2028 earnings at $15.15 EPS.

Watsco (NYSE:WSO - Get Free Report) last issued its quarterly earnings results on Wednesday, July 29th. The construction company reported $4.00 EPS for the quarter, missing the consensus estimate of $4.41 by ($0.41). Watsco had a return on equity of 14.40% and a net margin of 6.53%.The business had revenue of $2.10 billion for the quarter, compared to analyst estimates of $2.14 billion. During the same quarter in the prior year, the firm earned $4.52 EPS. The firm's quarterly revenue was up 2.1% compared to the same quarter last year.

Several other research analysts have also issued reports on WSO. Robert W. Baird set a $400.00 price target on Watsco in a research report on Thursday, July 30th. Weiss Ratings reaffirmed a "hold (c)" rating on shares of Watsco in a research note on Tuesday. DA Davidson cut their price target on shares of Watsco from $385.00 to $330.00 and set a "neutral" rating on the stock in a research report on Thursday, July 30th. Morgan Stanley boosted their price target on shares of Watsco from $370.00 to $405.00 and gave the company an "equal weight" rating in a report on Friday, July 10th. Finally, Stephens restated an "overweight" rating and issued a $485.00 price objective on shares of Watsco in a research report on Monday, August 17th. Two equities research analysts have rated the stock with a Buy rating, eight have issued a Hold rating and one has given a Sell rating to the company's stock. Based on data from MarketBeat, Watsco presently has a consensus rating of "Hold" and an average target price of $395.50.

Watsco Stock Performance

Shares of WSO stock opened at $320.08 on Friday. The firm's 50 day moving average price is $323.31 and its two-hundred day moving average price is $368.93. The stock has a market cap of $13.20 billion, a PE ratio of 27.76 and a beta of 1.05. Watsco has a 52-week low of $295.75 and a 52-week high of $459.00.

Institutional Inflows and Outflows

A number of institutional investors have recently bought and sold shares of WSO. Bayban bought a new position in shares of Watsco in the fourth quarter valued at $29,000. Western Wealth Management LLC acquired a new position in Watsco during the first quarter worth approximately $41,000. Commonwealth Retirement Investments LLC bought a new stake in Watsco in the fourth quarter valued at approximately $44,000. Versant Capital Management Inc raised its stake in Watsco by 293.3% in the second quarter. Versant Capital Management Inc now owns 118 shares of the construction company's stock valued at $49,000 after buying an additional 88 shares during the period. Finally, Clearstead Advisors LLC lifted its position in shares of Watsco by 45.0% in the fourth quarter. Clearstead Advisors LLC now owns 174 shares of the construction company's stock valued at $59,000 after buying an additional 54 shares during the last quarter. Institutional investors own 89.71% of the company's stock.

Watsco Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Friday, July 31st. Shareholders of record on Thursday, July 16th were issued a dividend of $3.30 per share. This represents a $13.20 annualized dividend and a yield of 4.1%. The ex-dividend date was Thursday, July 16th. Watsco's dividend payout ratio (DPR) is 114.48%.

Watsco News Summary

Here are the key news stories impacting Watsco this week:

• Positive Sentiment: Some analysts argue that Watsco may be undervalued based on its future cash-flow potential and could benefit from the industry’s transition to A2L refrigerants, which may support demand for replacement HVAC equipment. Watsco Stock Appears Undervalued Based on Future Cash Flow Watsco Could Be 14% Undervalued on Its A2L Transition Story
• Positive Sentiment: Zacks Research slightly increased its second-quarter 2028 EPS estimate to $5.09 from $5.06, while forecasting fiscal 2028 EPS of $15.15. The modest upgrade provides a limited indication of longer-term earnings potential.
• Neutral Sentiment: A separate industrial-distribution article highlighted competitive advantages among specialized distributors, a theme that may support Watsco’s long-term positioning but did not announce a company-specific development. Five Industrial Distributors With a Competitive Advantage
• Negative Sentiment: Zacks Research downgraded Watsco from “Hold” to “Strong Sell,” creating the clearest near-term bearish catalyst for WSO.
• Negative Sentiment: Zacks reduced its fiscal 2027 EPS forecast to $13.26 from $13.53, lowered second- and third-quarter estimates to $4.58, and cut fourth-quarter EPS to $2.16 from $2.33. Fiscal 2028 EPS was also trimmed to $15.15 from $15.26, suggesting weaker expected earnings momentum despite the small Q2 2028 increase.

Watsco Company Profile

Watsco, Inc is a distributor of heating, ventilation, air conditioning and refrigeration (HVAC/R) equipment and related products. The company supplies residential and commercial contractors with air conditioners, furnaces, heat pumps, refrigeration systems, ductwork, thermostats, controls, tools, replacement parts and other installation supplies.

Through its distribution network and digital sales platforms, Watsco serves HVAC/R contractors, dealers and other customers primarily across the United States, as well as in Canada and Puerto Rico.

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