Insights Ahead: Watsco's Quarterly Earnings

Watsco WSO is gearing up to announce its quarterly earnings on Wednesday, 2024-10-23. Here's a quick overview of what investors should know before the release.

Analysts are estimating that Watsco will report an earnings per share (EPS) of $4.76.

The announcement from Watsco is eagerly anticipated, with investors seeking news of surpassing estimates and favorable guidance for the next quarter.

It's worth noting for new investors that guidance can be a key determinant of stock price movements.

Historical Earnings Performance

The company's EPS missed by $0.18 in the last quarter, leading to a 1.74% increase in the share price on the following day.

Here's a look at Watsco's past performance and the resulting price change:

Tracking Watsco's Stock Performance

Shares of Watsco were trading at $492.22 as of October 21. Over the last 52-week period, shares are up 43.65%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release.

Analysts' Perspectives on Watsco

For investors, grasping market sentiments and expectations in the industry is vital. This analysis explores the latest insights regarding Watsco.

The consensus rating for Watsco is Outperform, derived from 3 analyst ratings. An average one-year price target of $499.0 implies a potential 1.38% upside.

Analyzing Ratings Among Peers

The analysis below examines the analyst ratings and average 1-year price targets of FTAI Aviation, Core & Main and Applied Industrial Techs, three significant industry players, providing valuable insights into their relative performance expectations and market positioning.

• FTAI Aviation received a Buy consensus from analysts, with an average 1-year price target of $134.44, implying a potential 72.69% downside.
• Core & Main received a Outperform consensus from analysts, with an average 1-year price target of $49.55, implying a potential 89.93% downside.
• Analysts currently favor an Outperform trajectory for Applied Industrial Techs, with an average 1-year price target of $236.5, suggesting a potential 51.95% downside.

Summary of Peers Analysis

The peer analysis summary provides a snapshot of key metrics for FTAI Aviation, Core & Main and Applied Industrial Techs, illuminating their respective standings within the industry. These metrics offer valuable insights into their market positions and comparative performance.

Key Takeaway:

Watsco ranks at the top for Revenue Growth and Gross Profit among its peers. However, it ranks at the bottom for Return on Equity. Overall, Watsco is positioned favorably compared to its peers based on the provided metrics.

Discovering Watsco: A Closer Look

Watsco is the largest heating, ventilation, air conditioning, and refrigeration products distributor in North America. The company primarily operates in the United States (90% of 2023 revenue) with significant exposure in the Sunbelt states. Watsco also has operations in Canada (5% of sales) and Latin America (5% of sales). The company's customer base consists of more than 125,000 contractors that serve the replacement and new construction HVACR markets for residential and light commercial applications.

Key Indicators: Watsco's Financial Health

Market Capitalization Analysis: With a profound presence, the company's market capitalization is above industry averages. This reflects substantial size and strong market recognition.

Revenue Growth: Watsco's revenue growth over a period of 3 months has been noteworthy. As of 30 June, 2024, the company achieved a revenue growth rate of approximately 6.8%. This indicates a substantial increase in the company's top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Industrials sector.

Net Margin: Watsco's financial strength is reflected in its exceptional net margin, which exceeds industry averages. With a remarkable net margin of 7.89%, the company showcases strong profitability and effective cost management.

Return on Equity (ROE): Watsco's ROE surpasses industry standards, highlighting the company's exceptional financial performance. With an impressive 6.57% ROE, the company effectively utilizes shareholder equity capital.

Return on Assets (ROA): Watsco's ROA surpasses industry standards, highlighting the company's exceptional financial performance. With an impressive 3.86% ROA, the company effectively utilizes its assets for optimal returns.

Debt Management: Watsco's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.16.

To track all earnings releases for Watsco visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.