Beyond The Numbers: 4 Analysts Discuss Watsco Stock

During the last three months, 4 analysts shared their evaluations of Watsco (NYSE:WSO), revealing diverse outlooks from bullish to bearish.

The table below provides a snapshot of their recent ratings, showcasing how sentiments have evolved over the past 30 days and comparing them to the preceding months.

The 12-month price targets assessed by analysts reveal further insights, featuring an average target of $421.25, a high estimate of $460.00, and a low estimate of $400.00. Observing a downward trend, the current average is 11.55% lower than the prior average price target of $476.25.

Investigating Analyst Ratings: An Elaborate Study

The perception of Watsco by financial experts is analyzed through recent analyst actions. The following summary presents key analysts, their recent evaluations, and adjustments to ratings and price targets.

Key Insights:

• Action Taken: In response to dynamic market conditions and company performance, analysts update their recommendations. Whether they 'Maintain', 'Raise', or 'Lower' their stance, it signifies their reaction to recent developments related to Watsco. This insight gives a snapshot of analysts' perspectives on the current state of the company.
• Rating: Offering a comprehensive view, analysts assess stocks qualitatively, spanning from 'Outperform' to 'Underperform'. These ratings convey expectations for the relative performance of Watsco compared to the broader market.
• Price Targets: Gaining insights, analysts provide estimates for the future value of Watsco's stock. This comparison reveals trends in analysts' expectations over time.

Understanding these analyst evaluations alongside key financial indicators can offer valuable insights into Watsco's market standing. Stay informed and make well-considered decisions with our Ratings Table.

Stay up to date on Watsco analyst ratings.

Unveiling the Story Behind Watsco

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 revenue), with significant exposure in the Sun Belt 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.

Financial Milestones: Watsco's Journey

Market Capitalization: Boasting an elevated market capitalization, the company surpasses industry averages. This signals substantial size and strong market recognition.

Decline in Revenue: Over the 3M period, Watsco faced challenges, resulting in a decline of approximately -3.59% in revenue growth as of 30 June, 2025. This signifies a reduction in the company's top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Industrials sector.

Net Margin: The company's net margin is below industry benchmarks, signaling potential difficulties in achieving strong profitability. With a net margin of 8.31%, the company may need to address challenges in effective cost control.

Return on Equity (ROE): Watsco's ROE falls below industry averages, indicating challenges in efficiently using equity capital. With an ROE of 6.32%, the company may face hurdles in generating optimal returns for shareholders.

Return on Assets (ROA): The company's ROA is a standout performer, exceeding industry averages. With an impressive ROA of 3.73%, the company showcases effective utilization of assets.

Debt Management: Watsco's debt-to-equity ratio is below the industry average. With a ratio of 0.16, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

What Are Analyst Ratings?

Within the domain of banking and financial systems, analysts specialize in reporting for specific stocks or defined sectors. Their work involves attending company conference calls and meetings, researching company financial statements, and communicating with insiders to publish "analyst ratings" for stocks. Analysts typically assess and rate each stock once per quarter.

In addition to their assessments, some analysts extend their insights by offering predictions for key metrics such as earnings, revenue, and growth estimates. This supplementary information provides further guidance for traders. It is crucial to recognize that, despite their specialization, analysts are human and can only provide forecasts based on their beliefs.

Which Stocks Are Analysts Recommending Now?

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