Piper Jaffray Lowers PT On WSO To $63

Piper Jaffray has lowered its price target on Watsco WSO from $69 to $63 following less than stellar 2Q results from the company. Says Piper Jaffray, in the report, “Watsco's 2Q results fell well short of estimates as the HVAC market is clearly suffering from a demand hangover related to the watered down federal incentives. While we expected warmer temps across many Sunbelt states to offset the potential effect of weaker incentives, the related volume failed to emerge. Watsco took a pass on full year guidance, instead offering their expectation for record results, not surprising given the various Carrier JVs of recent years. We have adjusted estimates lower by the magnitude of the 2Q miss and expect demand levels to normalize as the year progresses. We remain Neutral at these levels and have adjusted our PT to $63 from $69 based on 18x our new FY12E EPS of $3.52.” As mentioned above, Piper Jaffray remains at a Neutral rating on the stock. WSO closed yesterday at $60.06.