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

Key Points

• Analyst consensus is “Hold”: Nine of 11 analysts rate Watsco shares a hold, while two recommend buying. The average 12-month price target is $395.50.
• Quarterly results fell short of expectations: Watsco reported adjusted earnings of $4.00 per share versus the $4.41 consensus estimate, while revenue reached $2.10 billion, up 2.1% year over year but below forecasts.
• Dividend yield is approximately 4%: The company paid a quarterly dividend of $3.30 per share, or $13.20 annualized, though its payout ratio stands at a high 114.48%.

Watsco, Inc. (NYSE:WSO - Get Free Report) has been given an average recommendation of "Hold" by the eleven brokerages that are presently covering the company, MarketBeat.com reports. Nine research analysts have rated the stock with a hold recommendation and two have assigned a buy recommendation to the company. The average twelve-month price target among analysts that have covered the stock in the last year is $395.50.

A number of research analysts have issued reports on WSO shares. Morgan Stanley increased their target price 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. Wall Street Zen raised Watsco from a "sell" rating to a "hold" rating in a report on Saturday, May 2nd. Weiss Ratings reiterated a "hold (c)" rating on shares of Watsco in a research report on Friday, June 26th. Robert W. Baird set a $400.00 target price on shares of Watsco in a research report on Thursday, July 30th. Finally, Stephens upped their target price on Watsco from $475.00 to $485.00 and gave the company an "overweight" rating in a research note on Wednesday, April 29th.

Watsco Stock Performance

Shares of WSO opened at $333.60 on Thursday. The stock has a market capitalization of $13.56 billion, a P/E ratio of 28.93 and a beta of 1.05. Watsco has a 1 year low of $300.66 and a 1 year high of $459.00. The company's fifty day moving average is $376.46 and its two-hundred day moving average is $391.46.

Watsco (NYSE:WSO - Get Free Report) last announced its quarterly earnings data on Wednesday, July 29th. The construction company reported $4.00 EPS 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 net margin of 6.53% and a return on equity of 14.40%. Watsco's revenue for the quarter was up 2.1% on a year-over-year basis. During the same quarter in the previous year, the business earned $4.52 EPS. Sell-side analysts predict that Watsco will post 12.43 EPS for the current year.

Watsco Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Friday, July 31st. Stockholders of record on Thursday, July 16th were given a $3.30 dividend. This represents a $13.20 dividend on an annualized basis and a dividend yield of 4.0%. The ex-dividend date of this dividend was Thursday, July 16th. Watsco's payout ratio is currently 114.48%.

Institutional Trading of Watsco

A number of hedge funds have recently added to or reduced their stakes in the business. Torren Management LLC purchased a new stake in Watsco in the fourth quarter valued at approximately $26,000. Bayban acquired a new stake in shares of Watsco in the fourth quarter worth $29,000. Bamco Inc. NY purchased a new position in Watsco in the fourth quarter valued at about $35,000. Laurel Wealth Advisors LLC acquired a new position in Watsco during the 4th quarter worth approximately $37,000. Finally, Quarry LP purchased a new stake in Watsco during the 4th quarter worth $37,000. 89.71% of the stock is owned by institutional investors and hedge funds.

Watsco Company Profile

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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