Watsco (NYSE:WSO) Hits New 52-Week Low - Here's What Happened

Key Points

• Watsco shares hit a new 52-week low, falling to $289.76 and last trading at $287.42, below the prior close of $297.47. The stock’s 50-day and 200-day moving averages were $315.96 and $365.96, respectively.
• The company’s latest quarterly results missed expectations, with earnings per share of $4.00 versus the $4.41 consensus estimate and revenue of $2.10 billion versus $2.14 billion expected. Analysts collectively rate the stock “Hold,” with an average price target of $395.50.
• Watsco announced a quarterly dividend of $3.30 per share, equivalent to $13.20 annually and a 4.6% yield, payable October 30 to shareholders of record October 16.

Watsco, Inc. (NYSE:WSO - Get Free Report)'s stock price reached a new 52-week low on Monday. The stock traded as low as $289.76 and last traded at $287.4220, with a volume of 21944 shares trading hands. The stock had previously closed at $297.47.

Analyst Upgrades and Downgrades

Several brokerages recently issued reports on WSO. Robert W. Baird set a $400.00 price target on Watsco in a report on Thursday, July 30th. Morgan Stanley upped their target price on Watsco from $370.00 to $405.00 and gave the stock an "equal weight" rating in a research report on Friday, July 10th. Zacks Research lowered Watsco from a "hold" rating to a "strong sell" rating in a research note on Tuesday, September 22nd. Stephens reiterated an "overweight" rating and set a $485.00 target price on shares of Watsco in a report on Monday, August 17th. Finally, Weiss Ratings reissued a "hold (c)" rating on shares of Watsco in a research report on Tuesday, September 22nd. Two equities research analysts have rated the stock with a Buy rating, eight have given a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, Watsco currently has an average rating of "Hold" and an average target price of $395.50.

Watsco Stock Performance

The stock has a market cap of $11.91 billion, a price-to-earnings ratio of 25.06 and a beta of 1.06. The business's fifty day simple moving average is $315.96 and its 200 day simple moving average is $365.96.

Watsco (NYSE:WSO - Get Free Report) last announced its earnings results on Wednesday, July 29th. The construction company reported $4.00 earnings per share for the quarter, missing the consensus estimate of $4.41 by ($0.41). The business 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 firm's revenue was up 2.1% on a year-over-year basis. During the same quarter in the prior year, the business earned $4.52 earnings per share. As a group, analysts forecast that Watsco, Inc. will post 12.21 EPS for the current fiscal year.

Watsco Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Friday, October 30th. Stockholders of record on Friday, October 16th will be paid a dividend of $3.30 per share. This represents a $13.20 annualized dividend and a dividend yield of 4.6%. The ex-dividend date is Friday, October 16th. Watsco's dividend payout ratio is 114.48%.

Institutional Trading of Watsco

Hedge funds have recently made changes to their positions in the stock. Capital International Investors increased its position 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 purchasing an additional 2,356,998 shares during the last quarter. Confluence Investment Management LLC acquired a new stake in shares of Watsco in the 3rd quarter valued at about $96,991,000. Bank of America Corp DE bought a new position in shares of Watsco during the second quarter worth about $119,291,000. Bank of New York Mellon Corp bought a new position in shares of Watsco during the second quarter worth about $97,937,000. Finally, Findlay Park Partners LLP acquired a new position in Watsco in the second quarter worth about $78,695,000. Institutional investors and hedge funds own 89.71% of the company's stock.

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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