Piper Jaffray Remains Underweight On Watsco, Inc. (WSO)

Piper Jaffray has an Underweight rating, but is raising its price target on shares of Watsco, Inc. WSO to $60 from $55. In a note to investors, Piper Jaffray writes, "We are updating our estimates and price target after Watsco's most recent JV with Carrier. While we do view the transaction favorably based on it being immediately accretive and expanding Watsco's presence in the northeast United States, we remain UW based on valuation that appears extended relative to what we believe is a modest growth outlook for the HVAC industry. We continue to expect nearly flat organic growth in FY11 excluding the incremental volume from the latest Carrier transaction. Our new price target of $60 is based on 18x FY12 fully diluted EPS of 3.36." Shares of WSO gained 56 cents yesterday to close at $69.71.