William Blair Has Negative Forecast for Watsco Q3 Earnings

Key Points

• William Blair has lowered its Q3 2025 earnings per share (EPS) estimate for Watsco from $4.54 to $3.55, maintaining a "Market Perform" rating on the stock.
• Multiple analysts have reduced their target prices for Watsco, with Morgan Stanley lowering it from $505 to $460, and UBS Group from $450 to $425.
• Watsco recently declared a quarterly dividend of $3.00 per share, resulting in an annualized dividend of $12.00 and a dividend yield of 3.2%.

Watsco, Inc. (NYSE:WSO - Free Report) - Equities researchers at William Blair reduced their Q3 2025 EPS estimates for Watsco in a research report issued on Wednesday, October 15th. William Blair analyst R. Merkel now forecasts that the construction company will post earnings of $3.55 per share for the quarter, down from their prior forecast of $4.54. William Blair has a "Market Perform" rating on the stock. The consensus estimate for Watsco's current full-year earnings is $14.62 per share. William Blair also issued estimates for Watsco's Q4 2025 earnings at $1.75 EPS, FY2025 earnings at $11.75 EPS, Q1 2026 earnings at $2.08 EPS, Q2 2026 earnings at $4.31 EPS, Q3 2026 earnings at $4.05 EPS, Q4 2026 earnings at $2.25 EPS, FY2026 earnings at $12.69 EPS and FY2027 earnings at $14.85 EPS.

Several other research analysts have also weighed in on the stock. Morgan Stanley lowered their target price on shares of Watsco from $505.00 to $460.00 and set an "equal weight" rating on the stock in a research report on Wednesday, October 8th. UBS Group lowered their target price on shares of Watsco from $450.00 to $425.00 and set a "neutral" rating on the stock in a research report on Tuesday, September 23rd. JPMorgan Chase & Co. lowered their target price on shares of Watsco from $425.00 to $400.00 and set a "neutral" rating on the stock in a research report on Wednesday. Finally, Weiss Ratings reiterated a "hold (c+)" rating on shares of Watsco in a research report on Wednesday, October 8th. One investment analyst has rated the stock with a Buy rating and eight have assigned a Hold rating to the company. According to MarketBeat, Watsco currently has a consensus rating of "Hold" and a consensus target price of $462.50.

Watsco Stock Up 2.9%

Shares of Watsco stock opened at $370.02 on Friday. Watsco has a 52-week low of $350.00 and a 52-week high of $571.41. The company's 50-day simple moving average is $399.42 and its 200-day simple moving average is $441.28. The firm has a market cap of $15.00 billion, a price-to-earnings ratio of 28.38 and a beta of 0.94.

Watsco (NYSE:WSO - Get Free Report) last announced its 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). Watsco had a net margin of 7.08% and a return on equity of 16.96%. The business had revenue of $2.06 billion during the quarter, compared to analysts' expectations of $2.24 billion. During the same period in the previous year, the company posted $4.49 earnings per share. Watsco's quarterly revenue was down 3.6% on a year-over-year basis.

Hedge Funds Weigh In On Watsco

Several hedge funds and other institutional investors have recently made changes to their positions in WSO. WPG Advisers LLC bought a new stake in shares of Watsco in the 1st quarter worth about $25,000. Ameritas Advisory Services LLC acquired a new position in Watsco in the second quarter worth about $26,000. TCTC Holdings LLC grew its stake in Watsco by 115.4% in the first quarter. TCTC Holdings LLC now owns 56 shares of the construction company's stock worth $28,000 after purchasing an additional 30 shares in the last quarter. Rossby Financial LCC acquired a new position in Watsco in the first quarter worth about $33,000. Finally, TD Waterhouse Canada Inc. grew its stake in Watsco by 242.9% in the second quarter. TD Waterhouse Canada Inc. now owns 72 shares of the construction company's stock worth $33,000 after purchasing an additional 51 shares in the last quarter. Institutional investors and hedge funds own 89.71% of the company's stock.

Watsco Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Friday, October 31st. Shareholders of record on Thursday, October 16th will be issued a $3.00 dividend. This represents a $12.00 dividend on an annualized basis and a dividend yield of 3.2%. The ex-dividend date is Thursday, October 16th. Watsco's dividend payout ratio (DPR) is 92.02%.

Watsco Company Profile

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.

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