Barbara Oil Co. Purchases New Holdings in Watsco, Inc. $WSO

Key Points

• Barbara Oil Co. acquired 5,000 Watsco shares valued at approximately $2.05 million, while institutional investors collectively own 89.71% of the company.
• Watsco reported quarterly EPS of $4.00, below the $4.41 consensus estimate, although revenue rose 2.1% year over year to $2.10 billion. Shares opened at $311.57, near their 12-month low of $300.66.
• The company maintains a quarterly dividend of $3.30 per share, equivalent to a 4.2% yield, but analysts remain cautious with a consensus “Hold” rating and average price target of $395.50.

Barbara Oil Co. acquired a new stake in shares of Watsco, Inc. (NYSE:WSO - Free Report) in the 2nd quarter, according to its most recent disclosure with the Securities and Exchange Commission. The institutional investor acquired 5,000 shares of the construction company's stock, valued at approximately $2,052,000.

Several other hedge funds and other institutional investors also recently modified their holdings of the stock. Capital International Investors lifted its stake in shares of Watsco by 103.1% in the 4th quarter. Capital International Investors now owns 4,642,893 shares of the construction company's stock worth $1,564,423,000 after acquiring an additional 2,356,998 shares during the period. Charles Schwab Investment Management Inc. increased its stake in shares of Watsco by 3.1% during the fourth quarter. Charles Schwab Investment Management Inc. now owns 1,559,965 shares of the construction company's stock worth $525,634,000 after acquiring an additional 46,799 shares during the period. State Street Corp increased its stake in shares of Watsco by 1.4% during the third quarter. State Street Corp now owns 1,238,121 shares of the construction company's stock worth $500,572,000 after acquiring an additional 16,595 shares during the period. Geode Capital Management LLC raised its holdings in Watsco by 0.8% during the fourth quarter. Geode Capital Management LLC now owns 638,014 shares of the construction company's stock worth $214,373,000 after purchasing an additional 5,176 shares in the last quarter. Finally, Markel Group Inc. raised its holdings in Watsco by 0.8% during the first quarter. Markel Group Inc. now owns 582,169 shares of the construction company's stock worth $211,787,000 after purchasing an additional 4,500 shares in the last quarter. 89.71% of the stock is currently owned by hedge funds and other institutional investors.

Watsco Price Performance

Shares of NYSE:WSO opened at $311.57 on Monday. The business's 50 day simple moving average is $363.17 and its 200-day simple moving average is $385.72. The firm has a market capitalization of $12.85 billion, a price-to-earnings ratio of 27.02 and a beta of 1.05. Watsco, Inc. has a 12 month low of $300.66 and a 12 month high of $459.00.

Watsco (NYSE:WSO - Get Free Report) last released its quarterly earnings results on Wednesday, July 29th. The construction company reported $4.00 earnings per share for the quarter, missing analysts' consensus estimates of $4.41 by ($0.41). The firm had revenue of $2.10 billion during the quarter, compared to analyst estimates of $2.14 billion. Watsco had a return on equity of 14.40% and a net margin of 6.53%.The business's revenue was up 2.1% on a year-over-year basis. During the same quarter in the prior year, the company earned $4.52 EPS. On average, equities analysts anticipate that Watsco, Inc. will post 12.21 earnings per share for the current year.

Watsco Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Friday, July 31st. Stockholders of record on Thursday, July 16th were paid a dividend of $3.30 per share. This represents a $13.20 annualized dividend and a dividend yield of 4.2%. The ex-dividend date of this dividend was Thursday, July 16th. Watsco's payout ratio is 114.48%.

Watsco News Roundup

Here are the key news stories impacting Watsco this week:

• Positive Sentiment: Zacks raised its EPS forecast for Q1 2027 to $1.93 from $1.92 and Q1 2028 to $2.05 from $1.93. Its FY2028 estimate also increased to $15.26 from $14.93, suggesting analysts still see longer-term earnings growth potential. Watsco stock information
• Neutral Sentiment: The firm maintained estimates of $13.53 EPS for FY2027 and $15.26 for FY2028, while its current full-year consensus reference stands at approximately $12.43 per share. The revisions indicate a mixed outlook rather than a broad change in the long-term investment thesis.
• Negative Sentiment: Zacks cut its FY2026 EPS forecast to $12.21 from $12.56 and lowered Q3 2026 EPS to $4.21 from $4.29 and Q4 2026 EPS to $2.13 from $2.15. These reductions point to softer near-term earnings expectations.
• Negative Sentiment: Estimates were also reduced for Q2 2027 to $4.61 from $4.75, Q3 2027 to $4.65 from $4.69, and FY2027 to $13.53 from $13.70. The repeated cuts may weigh on sentiment, particularly because Watsco already trades at a meaningful earnings multiple despite its recent earnings miss.

Analyst Ratings Changes

WSO has been the topic of several recent analyst reports. DA Davidson dropped their target price on Watsco from $385.00 to $330.00 and set a "neutral" rating on the stock in a research report on Thursday, July 30th. Stephens reissued an "overweight" rating and issued a $485.00 price target on shares of Watsco in a report on Monday, August 17th. Robert W. Baird set a $400.00 price target on Watsco in a research note on Thursday, July 30th. Wall Street Zen raised Watsco from a "sell" rating to a "hold" rating in a report on Saturday, May 2nd. Finally, Weiss Ratings reaffirmed a "hold (c)" rating on shares of Watsco in a report on Friday, June 26th. Two research analysts have rated the stock with a Buy rating and nine have assigned a Hold rating to the company. Based on data from MarketBeat, Watsco presently has a consensus rating of "Hold" and an average price target of $395.50.

About Watsco

Watsco, Inc is the largest distributor of heating, ventilation, air conditioning and refrigeration (HVAC/R) equipment, parts and supplies in the United States. Headquartered in Miami, Florida, the company operates a network of more than 600 branches across the continental U.S., Canada and Puerto Rico. Watsco serves residential and commercial contractors by providing essential components for climate control systems, including air conditioners, furnaces, heat pumps, coils, refrigerants, controls and electrical and piping supplies.

Founded in 1947, Watsco has grown from a single regional distributor into an industry leader through a combination of organic expansion, acquisitions and strategic partnerships with original equipment manufacturers such as Carrier, Trane, Goodman and Lennox.

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