What to Expect from Watsco's Earnings

Watsco (NYSE:WSO) is gearing up to announce its quarterly earnings on Wednesday, 2025-04-23. Here's a quick overview of what investors should know before the release.

Analysts are estimating that Watsco will report an earnings per share (EPS) of $2.24.

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

In the previous earnings release, the company beat EPS by $0.21, leading to a 3.59% drop in the share price the following trading session.

Here's a look at Watsco's past performance and the resulting price change:

Performance of Watsco Shares

Shares of Watsco were trading at $494.91 as of April 21. Over the last 52-week period, shares are up 13.94%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release.

Analyst Views on Watsco

Understanding market sentiments and expectations within the industry is crucial for investors. This analysis delves into the latest insights on Watsco.

The consensus rating for Watsco is Neutral, derived from 3 analyst ratings. An average one-year price target of $511.67 implies a potential 3.39% upside.

Comparing Ratings with Competitors

The below comparison of the analyst ratings and average 1-year price targets of Core & Main, FTAI Aviation and Ferguson Enterprises, 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 $62.5, suggesting a potential 87.37% downside.
• Analysts currently favor an Outperform trajectory for FTAI Aviation, with an average 1-year price target of $130.25, suggesting a potential 73.68% downside.
• Analysts currently favor an Outperform trajectory for Ferguson Enterprises, with an average 1-year price target of $188.17, suggesting a potential 61.98% downside.

Comprehensive Peer Analysis Summary

Within the peer analysis summary, vital metrics for Core & Main, FTAI Aviation and Ferguson Enterprises are presented, shedding light on their respective standings within the industry and offering valuable insights into their market positions and comparative performance.

Key Takeaway:

Watsco ranks at the bottom for Revenue Growth among its peers. It is in the middle for Gross Profit and Return on Equity.

All You Need to Know About 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 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.

Unraveling the Financial Story of Watsco

Market Capitalization Highlights: Above the industry average, the company's market capitalization signifies a significant scale, indicating strong confidence and market prominence.

Positive Revenue Trend: Examining Watsco's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 9.4% as of 31 December, 2024, showcasing a substantial increase in top-line earnings. When compared to others in the Industrials sector, the company excelled with a growth rate higher than the average among peers.

Net Margin: Watsco's net margin lags behind industry averages, suggesting challenges in maintaining strong profitability. With a net margin of 5.14%, the company may face hurdles in effective cost management.

Return on Equity (ROE): Watsco's ROE is below industry standards, pointing towards difficulties in efficiently utilizing equity capital. With an ROE of 3.37%, the company may encounter challenges in delivering satisfactory returns for shareholders.

Return on Assets (ROA): The company's ROA is a standout performer, exceeding industry averages. With an impressive ROA of 2.0%, the company showcases effective utilization of assets.

Debt Management: With a below-average debt-to-equity ratio of 0.17, Watsco adopts a prudent financial strategy, indicating a balanced approach to debt management.

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.