Watsco, Inc. (NYSE:WSO) Receives Consensus Rating of "Hold" from Analysts

Key Points

• Analysts rate Watsco a "Hold" — eight analysts give a consensus "Hold" with an average 12‑month target of $382.80, which is well below the recent share price near $457.
• Quarterly results missed expectations — Watsco reported EPS of $1.68 versus $1.94 expected and revenue of $1.58B (down 9.9% year‑over‑year), signaling near‑term softness in demand.
• Dividend raised but payout appears elevated — the company boosted its quarterly dividend to $3.30 (annualized $13.20, yield ~2.9%) while the dividend payout ratio is about 109%.

Shares of Watsco, Inc. (NYSE:WSO - Get Free Report) have been given a consensus recommendation of "Hold" by the eight analysts that are covering the stock, MarketBeat Ratings reports. Eight equities research analysts have rated the stock with a hold rating. The average 12 month target price among analysts that have updated their coverage on the stock in the last year is $382.80.

WSO has been the subject of a number of recent research reports. UBS Group initiated coverage on Watsco in a report on Monday, January 5th. They issued a "neutral" rating and a $370.00 target price for the company. JPMorgan Chase & Co. increased their target price on Watsco from $370.00 to $400.00 and gave the stock a "neutral" rating in a report on Thursday, February 19th. Morgan Stanley dropped their target price on Watsco from $460.00 to $370.00 and set an "equal weight" rating for the company in a report on Wednesday, January 14th. Mizuho set a $425.00 price target on Watsco in a research report on Wednesday, February 18th. Finally, Zacks Research upgraded Watsco from a "strong sell" rating to a "hold" rating in a research report on Wednesday, February 25th.

Watsco Trading Up 3.7%

Shares of WSO opened at $457.02 on Tuesday. Watsco has a 1 year low of $323.05 and a 1 year high of $496.25. The stock has a 50 day simple moving average of $397.18 and a 200-day simple moving average of $375.63. The stock has a market cap of $18.55 billion, a PE ratio of 37.74 and a beta of 1.06.

Watsco (NYSE:WSO - Get Free Report) last issued its earnings results on Tuesday, February 17th. The construction company reported $1.68 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $1.94 by ($0.26). Watsco had a return on equity of 15.49% and a net margin of 6.87%.The company had revenue of $1.58 billion during the quarter, compared to analyst estimates of $1.62 billion. During the same period in the previous year, the company posted $2.37 earnings per share. The company's quarterly revenue was down 9.9% on a year-over-year basis. On average, sell-side analysts forecast that Watsco will post 12.53 EPS for the current fiscal year.

Watsco Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, April 30th. Investors of record on Thursday, April 16th will be given a dividend of $3.30 per share. This is a boost from Watsco's previous quarterly dividend of $3.00. The ex-dividend date is Thursday, April 16th. This represents a $13.20 dividend on an annualized basis and a yield of 2.9%. Watsco's dividend payout ratio is currently 109.00%.

Institutional Investors Weigh In On Watsco

A number of large investors have recently bought and sold shares of the business. Capital International Investors grew its position in Watsco by 103.1% during 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 last quarter. Charles Schwab Investment Management Inc. grew its position in Watsco by 3.1% during the 4th 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 last quarter. State Street Corp grew its position in Watsco by 1.4% during the 3rd 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 last quarter. Geode Capital Management LLC grew its position in Watsco by 0.8% during the 4th quarter. Geode Capital Management LLC now owns 638,014 shares of the construction company's stock worth $214,373,000 after acquiring an additional 5,176 shares during the last quarter. Finally, M&T Bank Corp grew its position in Watsco by 60,779.4% during the 4th quarter. M&T Bank Corp now owns 599,662 shares of the construction company's stock worth $202,056,000 after acquiring an additional 598,677 shares during the last quarter. 89.71% of the stock is currently owned by institutional investors.

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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