Watsco (NYSE:WSO) Sets New 52-Week Low - Time to Sell?

Key Points

• Watsco shares fell to a new 52-week low of $277.34, well below their 50-day and 200-day moving averages of $311.06 and $362.62, respectively.
• Analyst sentiment is mostly cautious: the stock has an average “Hold” rating, with a consensus price target of $395.50, while some firms recently lowered targets or issued a “Strong Sell” rating.
• Watsco missed quarterly earnings and revenue expectations, reporting $4.00 in EPS versus $4.41 expected and $2.10 billion in revenue versus $2.14 billion forecast. The company nevertheless announced a $3.30 quarterly dividend, equal to a 4.7% annualized yield, though its payout ratio exceeds 100%.

Watsco, Inc. (NYSE:WSO - Get Free Report)'s share price hit a new 52-week low during mid-day trading on Monday. The stock traded as low as $277.34 and last traded at $279.8950, with a volume of 554,792 shares traded. The stock had previously closed at $279.90.

Analyst Ratings Changes

Several equities analysts recently weighed in on the company. Robert W. Baird set a $400.00 target price on Watsco in a research report on Thursday, July 30th. DA Davidson lowered their price target on Watsco from $385.00 to $330.00 and set a "neutral" rating for the company in a research report on Thursday, July 30th. Weiss Ratings lowered shares of Watsco from a "hold (c)" rating to a "hold (c-)" rating in a report on Tuesday, October 6th. Zacks Research downgraded Watsco from a "hold" rating to a "strong sell" rating in a research report on Tuesday, September 22nd. Finally, Stephens reissued an "overweight" rating and set a $485.00 target price on shares of Watsco in a research report on Monday, August 17th. Two analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the stock presently has an average rating of "Hold" and a consensus price target of $395.50.

Watsco Stock Performance

The stock has a market cap of $11.57 billion, a price-to-earnings ratio of 24.17 and a beta of 1.06. The company's 50 day simple moving average is $311.06 and its 200 day simple moving average is $362.62.

Watsco (NYSE:WSO - Get Free Report) last released its 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 for the quarter was up 2.1% on a year-over-year basis. During the same quarter last year, the company earned $4.52 earnings per share. Sell-side analysts predict that Watsco, Inc. will post 12.22 EPS for the current year.

Watsco Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Friday, October 30th. Shareholders of record on Friday, October 16th will be paid a dividend of $3.30 per share. The ex-dividend date of this dividend is Friday, October 16th. This represents a $13.20 dividend on an annualized basis and a dividend yield of 4.7%. Watsco's dividend payout ratio (DPR) is 114.48%.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently bought and sold shares of the company. GK Wealth Management LLC bought a new position in Watsco during the 3rd quarter worth about $63,000. GAMMA Investing LLC increased its stake in Watsco by 72.0% in the 3rd quarter. GAMMA Investing LLC now owns 3,355 shares of the construction company's stock valued at $1,016,000 after buying an additional 1,404 shares during the last quarter. Fenimore Asset Management Inc boosted its holdings in shares of Watsco by 18.8% in the 3rd quarter. Fenimore Asset Management Inc now owns 95,325 shares of the construction company's stock worth $28,854,000 after buying an additional 15,108 shares during the last quarter. Everhart Financial Group Inc. bought a new position in shares of Watsco during the 3rd quarter valued at approximately $255,000. Finally, Avidian Wealth Enterprises LLC lifted its position in shares of Watsco by 15.3% during the 3rd quarter. Avidian Wealth Enterprises LLC now owns 1,336 shares of the construction company's stock valued at $404,000 after buying an additional 177 shares during the last quarter. Hedge funds and other institutional investors 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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