Watsco (NYSE:WSO) Downgraded by Zacks Research to Strong Sell

Zacks Research lowered shares of Watsco (NYSE:WSO) from a hold rating to a strong sell rating in a report issued on Tuesday,Zacks reports. Zacks Research also issued estimates for Watsco’s Q2 2027 earnings at $4.58 EPS, Q3 2027 earnings at $4.58 EPS, Q4 2027 earnings at $2.16 EPS and FY2027 earnings at $13.26 EPS.

WSO has been the subject of several other research reports. Stephens reissued an “overweight” rating and set a $485.00 price objective on shares of Watsco in a research report on Monday, August 17th. Morgan Stanley lifted their price target on shares of Watsco from $370.00 to $405.00 and gave the company an “equal weight” rating in a research report on Friday, July 10th. Weiss Ratings reissued a “hold (c)” rating on shares of Watsco in a research note on Friday, June 26th. DA Davidson cut their price objective on shares of Watsco from $385.00 to $330.00 and set a “neutral” rating on the stock in a report on Thursday, July 30th. Finally, Robert W. Baird set a $400.00 target price on shares of Watsco in a research note on Thursday, July 30th. Two equities research analysts have rated the stock with a Buy rating, eight have given a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, Watsco currently has an average rating of “Hold” and an average price target of $395.50.

Watsco Trading Up 0.1%

Shares of WSO opened at $325.79 on Tuesday. Watsco has a 1-year low of $295.75 and a 1-year high of $459.00. The firm’s 50-day moving average price is $324.61 and its 200-day moving average price is $369.45. The firm has a market capitalization of $13.44 billion, a price-to-earnings ratio of 28.26 and a beta of 1.05.

Watsco (NYSE:WSO) last issued its quarterly earnings data on Wednesday, July 29th. The construction company reported $4.00 EPS for the quarter, missing the consensus estimate of $4.41 by ($0.41). Watsco had a return on equity of 14.40% and a net margin of 6.53%.The company had revenue of $2.10 billion during the quarter, compared to analysts’ expectations of $2.14 billion. During the same quarter last year, the business earned $4.52 earnings per share. The business’s quarterly revenue was up 2.1% on a year-over-year basis. On average, research analysts forecast that Watsco will post 12.21 EPS for the current fiscal year.

Watsco Dividend Announcement

The business also recently declared a quarterly dividend, which was paid on Friday, July 31st. Stockholders of record on Thursday, July 16th were issued a dividend of $3.30 per share. The ex-dividend date was Thursday, July 16th. This represents a $13.20 annualized dividend and a dividend yield of 4.1%. Watsco’s dividend payout ratio (DPR) is presently 114.48%.

Hedge Funds Weigh In On Watsco

A number of hedge funds have recently bought and sold shares of the company. 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. Geode Capital Management LLC raised its holdings in Watsco by 0.8% in 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. Markel Group Inc. lifted its position in Watsco by 0.8% in the 1st quarter. Markel Group Inc. now owns 582,169 shares of the construction company’s stock valued at $211,787,000 after acquiring an additional 4,500 shares in the last quarter. Captrust Financial Advisors lifted its position in Watsco by 1.5% in the 4th quarter. Captrust Financial Advisors now owns 396,514 shares of the construction company’s stock valued at $133,605,000 after acquiring an additional 6,034 shares in the last quarter. Finally, Bank of America Corp DE bought a new position in Watsco in the 2nd quarter valued at approximately $119,291,000. Institutional investors own 89.71% of the company’s stock.

About Watsco

Watsco, Inc is a distributor of heating, ventilation, air conditioning and refrigeration (HVAC/R) equipment and related products. The company supplies residential and commercial contractors with air conditioners, furnaces, heat pumps, refrigeration systems, ductwork, thermostats, controls, tools, replacement parts and other installation supplies.

Through its distribution network and digital sales platforms, Watsco serves HVAC/R contractors, dealers and other customers primarily across the United States, as well as in Canada and Puerto Rico.