Zacks Research Issues Negative Estimate for Watsco Earnings

Watsco, Inc. (NYSE:WSO) – Analysts at Zacks Research lowered their Q3 2026 earnings per share estimates for Watsco in a note issued to investors on Wednesday, August 19th. Zacks Research analyst Team now forecasts that the construction company will post earnings per share of $4.21 for the quarter, down from their previous forecast of $4.29. The consensus estimate for Watsco’s current full-year earnings is $12.43 per share. Zacks Research also issued estimates for Watsco’s Q4 2026 earnings at $2.13 EPS, FY2026 earnings at $12.21 EPS, Q1 2027 earnings at $1.93 EPS, Q2 2027 earnings at $4.61 EPS, Q3 2027 earnings at $4.65 EPS, Q4 2027 earnings at $2.33 EPS, FY2027 earnings at $13.53 EPS, Q1 2028 earnings at $2.05 EPS, Q2 2028 earnings at $5.06 EPS and FY2028 earnings at $15.26 EPS.

A number of other brokerages have also weighed in on WSO. Robert W. Baird set a $400.00 price objective on Watsco in a report on Thursday, July 30th. Stephens reissued an “overweight” rating and set a $485.00 target price on shares of Watsco in a research note on Monday. Morgan Stanley raised their price target on Watsco from $370.00 to $405.00 and gave the company an “equal weight” rating in a report on Friday, July 10th. Weiss Ratings reaffirmed a “hold (c)” rating on shares of Watsco in a research note on Friday, June 26th. Finally, Wall Street Zen raised shares of Watsco from a “sell” rating to a “hold” rating in a research note on Saturday, May 2nd. Two analysts have rated the stock with a Buy rating and nine have assigned a Hold rating to the stock. According to data from MarketBeat, the company currently has a consensus rating of “Hold” and an average target price of $395.50.

Watsco Stock Up 2.0%

NYSE WSO opened at $319.91 on Thursday. The stock has a market capitalization of $13.20 billion, a P/E ratio of 27.75 and a beta of 1.05. Watsco has a 52-week low of $300.66 and a 52-week high of $459.00. The firm has a 50-day moving average price of $365.93 and a 200 day moving average price of $386.76.

Watsco (NYSE:WSO) last announced its quarterly earnings data on Wednesday, July 29th. The construction company reported $4.00 earnings per share (EPS) for the quarter, missing the consensus estimate of $4.41 by ($0.41). Watsco had a net margin of 6.53% and a return on equity of 14.40%. The firm had revenue of $2.10 billion during the quarter, compared to analyst estimates of $2.14 billion. During the same period in the prior year, the firm posted $4.52 earnings per share. The business’s quarterly revenue was up 2.1% compared to the same quarter last year.

Hedge Funds Weigh In On Watsco

Several institutional investors have recently added to or reduced their stakes in the business. Capital International Investors increased its stake in shares of Watsco by 103.1% during the 4th quarter. Capital International Investors now owns 4,642,893 shares of the construction company’s stock valued at $1,564,423,000 after acquiring an additional 2,356,998 shares during the last quarter. Charles Schwab Investment Management Inc. lifted its holdings in shares of Watsco by 3.1% during the 4th quarter. Charles Schwab Investment Management Inc. now owns 1,559,965 shares of the construction company’s stock worth $525,634,000 after acquiring an additional 46,799 shares during the period. State Street Corp boosted its position in shares of Watsco by 1.4% in the third quarter. State Street Corp now owns 1,238,121 shares of the construction company’s stock worth $500,572,000 after acquiring an additional 16,595 shares during the last quarter. Geode Capital Management LLC boosted its position in shares of Watsco by 0.8% in the fourth 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. Finally, M&T Bank Corp boosted its holdings in shares of Watsco by 60,779.4% in the 4th quarter. M&T Bank Corp now owns 599,662 shares of the construction company’s stock valued at $202,056,000 after purchasing an additional 598,677 shares during the last quarter. 89.71% of the stock is currently owned by institutional investors and hedge funds.

Watsco Dividend Announcement

The company also recently announced a quarterly dividend, which was paid on Friday, July 31st. Shareholders of record on Thursday, July 16th were paid a $3.30 dividend. This represents a $13.20 annualized dividend and a yield of 4.1%. The ex-dividend date of this dividend was Thursday, July 16th. Watsco’s payout ratio is presently 114.48%.

Watsco News Summary

Here are the key news stories impacting Watsco this week:

• Positive Sentiment: Zacks Research raised its FY2028 EPS forecast to $15.26 from $14.93, suggesting analysts still see meaningful long-term earnings growth. The firm also increased its Q1 2027 estimate slightly to $1.93 from $1.92 and its Q1 2028 estimate to $2.05 from $1.93. Watsco analyst estimates
• Positive Sentiment: Stephens reaffirmed an Overweight rating on Watsco, maintaining a constructive view of the company’s shares. Stephens Reaffirms Overweight Rating for Watsco
• Neutral Sentiment: Zacks’ FY2028 EPS forecast of $15.26 remains above its FY2026 estimate of $12.21 and FY2027 estimate of $13.53, indicating a continued longer-term growth outlook. However, the current-year consensus estimate is $12.43, leaving FY2026 expectations slightly below consensus.
• Negative Sentiment: Zacks Research cut its FY2026 EPS forecast to $12.21 from $12.56 and reduced FY2027 EPS to $13.53 from $13.70. It also lowered estimates for Q3 2026 to $4.21 from $4.29, Q4 2026 to $2.13 from $2.15, Q2 2027 to $4.61 from $4.75, Q3 2027 to $4.65 from $4.69, Q4 2027 to $2.33 from $2.34, and Q2 2028 to $5.06 from $5.24. The broad pattern of downward revisions signals softer near- and medium-term earnings expectations.

Watsco Company Profile

Watsco, Inc is the largest distributor of heating, ventilation, air conditioning and refrigeration (HVAC/R) equipment, parts and supplies in the United States. Headquartered in Miami, Florida, the company operates a network of more than 600 branches across the continental U.S., Canada and Puerto Rico. Watsco serves residential and commercial contractors by providing essential components for climate control systems, including air conditioners, furnaces, heat pumps, coils, refrigerants, controls and electrical and piping supplies.

Founded in 1947, Watsco has grown from a single regional distributor into an industry leader through a combination of organic expansion, acquisitions and strategic partnerships with original equipment manufacturers such as Carrier, Trane, Goodman and Lennox.