Watsco (NYSE:WSO) Shares Gap Down After Analyst Downgrade

Key Points

• Watsco's shares gapped down after JPMorgan Chase & Co. downgraded their price target from $425.00 to $400.00, opening at $357.22 compared to the previous close of $366.36.
• The company reported Q2 earnings of $4.52 per share, missing estimates by $0.32, and a revenue of $2.06 billion, which was below analyst expectations.
• Watsco declared a quarterly dividend of $3.00 per share, set to be paid on October 31st, resulting in an annualized yield of 3.3%.

Watsco, Inc. (NYSE:WSO - Get Free Report)'s share price gapped down before the market opened on Wednesday after JPMorgan Chase & Co. lowered their price target on the stock from $425.00 to $400.00. The stock had previously closed at $366.36, but opened at $357.22. JPMorgan Chase & Co. currently has a neutral rating on the stock. Watsco shares last traded at $365.58, with a volume of 132,451 shares trading hands.

WSO has been the subject of several other reports. Weiss Ratings restated a "hold (c+)" rating on shares of Watsco in a research report on Wednesday, October 8th. William Blair restated a "market perform" rating on shares of Watsco in a research report on Wednesday. UBS Group cut their price objective on shares of Watsco from $450.00 to $425.00 and set a "neutral" rating for the company in a research report on Tuesday, September 23rd. Finally, Morgan Stanley cut their price objective on shares of Watsco from $505.00 to $460.00 and set an "equal weight" rating for the company in a research report on Wednesday, October 8th. One analyst has rated the stock with a Buy rating and eight have assigned a Hold rating to the stock. According to data from MarketBeat, the company has an average rating of "Hold" and an average price target of $462.50.

Institutional Trading of Watsco

A number of institutional investors and hedge funds have recently bought and sold shares of the business. OneDigital Investment Advisors LLC acquired a new stake in Watsco in the first quarter valued at approximately $266,000. Goldman Sachs Group Inc. increased its position in Watsco by 62.8% in the first quarter. Goldman Sachs Group Inc. now owns 468,875 shares of the construction company's stock worth $238,329,000 after buying an additional 180,951 shares during the period. Teacher Retirement System of Texas acquired a new stake in Watsco in the first quarter worth $2,588,000. Golden State Wealth Management LLC increased its position in Watsco by 109.4% in the first quarter. Golden State Wealth Management LLC now owns 222 shares of the construction company's stock worth $113,000 after buying an additional 116 shares during the period. Finally, Voya Investment Management LLC increased its position in Watsco by 23.1% in the first quarter. Voya Investment Management LLC now owns 16,218 shares of the construction company's stock worth $8,244,000 after buying an additional 3,045 shares during the period. Institutional investors and hedge funds own 89.71% of the company's stock.

Watsco Price Performance

The company has a 50-day simple moving average of $401.51 and a two-hundred day simple moving average of $442.81. The stock has a market capitalization of $14.62 billion, a price-to-earnings ratio of 27.65 and a beta of 0.94.

Watsco (NYSE:WSO - Get Free Report) last issued its quarterly earnings results on Wednesday, July 30th. The construction company reported $4.52 EPS for the quarter, missing analysts' consensus estimates of $4.84 by ($0.32). The business had revenue of $2.06 billion for the quarter, compared to analyst estimates of $2.24 billion. Watsco had a net margin of 7.08% and a return on equity of 16.96%. Watsco's revenue for the quarter was down 3.6% on a year-over-year basis. During the same period last year, the business posted $4.49 earnings per share. Research analysts anticipate that Watsco, Inc. will post 14.62 EPS for the current year.

Watsco Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, October 31st. Stockholders of record on Thursday, October 16th will be issued a dividend of $3.00 per share. This represents a $12.00 dividend on an annualized basis and a dividend yield of 3.3%. The ex-dividend date of this dividend is Thursday, October 16th. Watsco's dividend payout ratio (DPR) is 92.02%.

About Watsco

Watsco, Inc, together with its subsidiaries, engages in the distribution of air conditioning, heating, refrigeration equipment, and related parts and supplies in the United States and internationally. The company distributes equipment, including residential ducted and ductless air conditioners, such as gas, electric, and oil furnaces; commercial air conditioning and heating equipment systems; and other specialized equipment.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest and most accurate reporting. This story was reviewed by MarketBeat's editorial team prior to publication. Please send any questions or comments about this story to contact@marketbeat.com.