What is Zacks Research's Forecast for Watsco Q3 Earnings?

Key Points

• Zacks Research raised its Q3 2026 EPS estimate for Watsco to $4.29 from $4.22, and also lifted several other near-term forecasts, including full-year 2026 EPS to $12.56.
• Despite the higher estimates, Zacks kept a Hold rating on Watsco, signaling a neutral view on the stock. The broader analyst consensus remains Hold, with an average target price of about $399.83.
• Watsco recently beat expectations in its latest quarter, reporting $1.87 EPS versus $1.73 expected and revenue of $1.53 billion versus $1.49 billion estimated. The company also raised its quarterly dividend to $3.30 from $3.00.

Watsco, Inc. (NYSE:WSO - Free Report) - Investment analysts at Zacks Research lifted their Q3 2026 earnings estimates for shares of Watsco in a research note issued on Tuesday, May 19th. Zacks Research analyst Team now forecasts that the construction company will earn $4.29 per share for the quarter, up from their previous estimate of $4.22. Zacks Research currently has a "Hold" rating on the stock. The consensus estimate for Watsco's current full-year earnings is $12.70 per share. Zacks Research also issued estimates for Watsco's FY2026 earnings at $12.56 EPS, Q1 2027 earnings at $1.92 EPS, Q2 2027 earnings at $4.75 EPS, Q3 2027 earnings at $4.69 EPS and Q4 2027 earnings at $2.34 EPS.

A number of other equities research analysts have also recently weighed in on the company. Wall Street Zen upgraded Watsco from a "sell" rating to a "hold" rating in a research note on Saturday, May 2nd. Stephens lifted 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. Mizuho set a $425.00 target price on shares of Watsco in a report on Wednesday, February 18th. Finally, JPMorgan Chase & Co. raised their price target on shares of Watsco from $370.00 to $400.00 and gave the company a "neutral" rating in a report on Thursday, February 19th. One investment analyst has rated the stock with a Buy rating and eight have issued a Hold rating to the stock. According to data from MarketBeat.com, the company presently has an average rating of "Hold" and an average target price of $399.83.

Watsco Trading Down 2.1%

Shares of NYSE WSO opened at $378.29 on Friday. Watsco has a 12-month low of $323.05 and a 12-month high of $494.94. The stock's fifty day simple moving average is $399.47 and its two-hundred day simple moving average is $381.15. The stock has a market capitalization of $15.38 billion, a PE ratio of 31.39 and a beta of 1.12.

Watsco (NYSE:WSO - Get Free Report) last issued its quarterly earnings data on Tuesday, April 28th. The construction company reported $1.87 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.73 by $0.14. The company had revenue of $1.53 billion for the quarter, compared to analyst estimates of $1.49 billion. Watsco had a net margin of 6.85% and a return on equity of 15.31%. Watsco's revenue was up .1% compared to the same quarter last year. During the same period last year, the company posted $1.93 earnings per share.

Institutional Trading of Watsco

Large investors have recently bought and sold shares of the stock. Capital International Investors grew its holdings in shares of Watsco by 103.1% during the fourth quarter. Capital International Investors now owns 4,642,893 shares of the construction company's stock valued at $1,564,423,000 after buying an additional 2,356,998 shares during the last quarter. Charles Schwab Investment Management Inc. lifted 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 period. State Street Corp lifted 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 period. Geode Capital Management LLC grew its stake in Watsco by 0.8% during the 4th quarter. Geode Capital Management LLC now owns 638,014 shares of the construction company's stock valued at $214,373,000 after purchasing an additional 5,176 shares during the last quarter. Finally, M&T Bank Corp grew its stake 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 valued at $202,056,000 after purchasing an additional 598,677 shares during the last quarter. Hedge funds and other institutional investors own 89.71% of the company's stock.

Watsco Increases Dividend

The business also recently disclosed a quarterly dividend, which was paid on Thursday, April 30th. Investors of record on Thursday, April 16th were given a $3.30 dividend. This represents a $13.20 annualized dividend and a dividend yield of 3.5%. The ex-dividend date of this dividend was Thursday, April 16th. This is an increase from Watsco's previous quarterly dividend of $3.00. Watsco's payout ratio is 109.54%.

Key Stories Impacting Watsco

Here are the key news stories impacting Watsco this week:

• Positive Sentiment: Zacks Research raised some near-term estimates, including FY2026 EPS to $12.56, Q3 2026 EPS to $4.29, Q1 2027 EPS to $1.92, Q2 2027 EPS to $4.75, and Q3 2027 EPS to $4.69.
• Neutral Sentiment: Despite the estimate changes, Zacks Research kept a Hold rating on Watsco, suggesting a neutral stance on the shares.
• Negative Sentiment: Analysts lowered longer-term profit expectations, including FY2027 EPS to $13.70, FY2028 EPS to $14.93, Q4 2027 EPS to $2.34, and Q1 2028 EPS to $1.93, which may raise concerns about earnings momentum and valuation.

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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