UPDATE: J.P. Morgan Reiterates Overweight Rating, Raises PT on Watsco

In a report published Monday, J.P. Morgan & Co. reiterated its Overweight rating on Watsco

, and raised its price target from $70.00 to $78.00. J.P. Morgan noted, “We view Watsco as offering an attractive combination of end market leverage and company-specific drivers. First, WSO has the most exposure in our group to residential HVAC, an end market that remains near trough and where we see a strong multi-year growth profile when pent up demand is eventually unwound. Second, WSO holds a market leading position in the North American HVACR distribution industry, multiple times the size of its nearest peers, but still represents ~10% of the overall industry, offering significant opportunities for consolidation, in our view. Finally, we believe cash remains a bright spot, with low capital needs and FCF conversion well in excess of net income, helping to drive (a) M&A activity, and (b) return of cash to shareholders, including an attractive dividend yield.” Watsco closed on Friday at $78.00.