Exploring Watsco's Earnings Expectations
Watsco (NYSE:WSO) is set to give its latest quarterly earnings report on Wednesday, 2025-07-30. Here's what investors need to know before the announcement.
Analysts estimate that Watsco will report an earnings per share (EPS) of $4.82.
The market awaits Watsco's announcement, with hopes high for news of surpassing estimates and providing upbeat guidance for the next quarter.
It's important for new investors to understand that guidance can be a significant driver of stock prices.
Earnings History Snapshot
During the last quarter, the company reported an EPS missed by $0.33, leading to a 1.5% increase in the share price on the subsequent day.
Here's a look at Watsco's past performance and the resulting price change:
| Quarter | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 |
|---|---|---|---|---|
| EPS Estimate | 2.26 | 2.16 | 4.73 | 4.67 |
| EPS Actual | 1.93 | 2.37 | 4.22 | 4.49 |
| Price Change % | 1.0% | -4.0% | 3.0% | 2.0% |
Stock Performance
Shares of Watsco were trading at $479.86 as of July 28. Over the last 52-week period, shares are down 4.14%. Given that these returns are generally negative, long-term shareholders are likely bearish going into this earnings release.
Analyst Insights on Watsco
For investors, staying informed about market sentiments and expectations in the industry is paramount. This analysis provides an exploration of the latest insights on Watsco.
Analysts have provided Watsco with 2 ratings, resulting in a consensus rating of Neutral. The average one-year price target stands at $455.0, suggesting a potential 5.18% downside.
Analyzing Ratings Among Peers
The below comparison of the analyst ratings and average 1-year price targets of Core & Main, FTAI Aviation and WESCO Intl, three prominent players in the industry, gives insights for their relative performance expectations and market positioning.
- Analysts currently favor an Outperform trajectory for Core & Main, with an average 1-year price target of $65.14, suggesting a potential 86.43% downside.
- Analysts currently favor an Outperform trajectory for FTAI Aviation, with an average 1-year price target of $145.75, suggesting a potential 69.63% downside.
- Analysts currently favor an Outperform trajectory for WESCO Intl, with an average 1-year price target of $201.0, suggesting a potential 58.11% downside.
Analysis Summary for Peers
In the peer analysis summary, key metrics for Core & Main, FTAI Aviation and WESCO Intl are highlighted, providing an understanding of their respective standings within the industry and offering insights into their market positions and comparative performance.
| Company | Consensus | Revenue Growth | Gross Profit | Return on Equity |
|---|---|---|---|---|
| Watsco | Neutral | -2.17% | $429.62M | 2.74% |
| Core & Main | Outperform | 9.76% | $510M | 5.81% |
| FTAI Aviation | Outperform | 53.69% | $193.80M | 164.26% |
| WESCO Intl | Outperform | -0.12% | $1.13B | 2.08% |
Key Takeaway:
Watsco ranks at the bottom for Revenue Growth and Gross Profit, while it is in the middle for Return on Equity.
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 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.
Breaking Down Watsco's Financial Performance
Market Capitalization Analysis: The company's market capitalization surpasses industry averages, showcasing a dominant size relative to peers and suggesting a strong market position.
Decline in Revenue: Over the 3 months period, Watsco faced challenges, resulting in a decline of approximately -2.17% in revenue growth as of 31 March, 2025. This signifies a reduction in the company's top-line earnings. When compared to others in the Industrials sector, the company faces challenges, achieving a growth rate lower than the average among peers.
Net Margin: Watsco's net margin is below industry standards, pointing towards difficulties in achieving strong profitability. With a net margin of 4.76%, the company may encounter challenges in effective cost control.
Return on Equity (ROE): Watsco's ROE is below industry averages, indicating potential challenges in efficiently utilizing equity capital. With an ROE of 2.74%, the company may face hurdles in achieving optimal financial returns.
Return on Assets (ROA): The company's ROA is a standout performer, exceeding industry averages. With an impressive ROA of 1.63%, the company showcases effective utilization of assets.
Debt Management: Watsco's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.17.
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.