Watsco (NYSE:WSO) Shares Gap Down on Disappointing Earnings

Watsco, Inc. (NYSE:WSO) gapped down before the market opened on Wednesday following a dissappointing earnings announcement. The stock had previously closed at $503.16, but opened at $472.50. Watsco shares last traded at $478.64, with a volume of 135,811 shares trading hands.

The construction company reported $1.93 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $2.29 by ($0.36). The business had revenue of $1.53 billion for the quarter, compared to analysts’ expectations of $1.66 billion. Watsco had a return on equity of 17.59% and a net margin of 7.04%. During the same quarter in the prior year, the company posted $2.17 EPS.

Watsco Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Wednesday, April 30th. Investors of record on Tuesday, April 15th will be issued a $3.00 dividend. This represents a $12.00 annualized dividend and a yield of 2.69%. The ex-dividend date is Tuesday, April 15th. This is an increase from Watsco’s previous quarterly dividend of $2.70. Watsco’s dividend payout ratio (DPR) is 90.57%.

Analysts Set New Price Targets

WSO has been the subject of a number of analyst reports. Raymond James assumed coverage on Watsco in a research report on Friday, January 17th. They set a “market perform” rating for the company. Robert W. Baird raised their price target on Watsco from $540.00 to $560.00 and gave the stock an “outperform” rating in a research note on Wednesday, February 19th. Morgan Stanley started coverage on Watsco in a research note on Monday, April 14th. They set an “equal weight” rating and a $515.00 price target for the company. Finally, Loop Capital raised their price objective on shares of Watsco from $450.00 to $460.00 and gave the company a “hold” rating in a research report on Thursday, February 27th. Five equities research analysts have rated the stock with a hold rating and two have given a buy rating to the company. Based on data from MarketBeat.com, the company has a consensus rating of “Hold” and an average price target of $492.00.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently bought and sold shares of WSO. GAMMA Investing LLC grew its position in Watsco by 89,376.0% in the first quarter. GAMMA Investing LLC now owns 477,802 shares of the construction company’s stock worth $242,867,000 after buying an additional 477,268 shares during the last quarter. Norges Bank purchased a new position in Watsco during the fourth quarter valued at approximately $118,312,000. Lord Abbett & CO. LLC acquired a new position in shares of Watsco in the fourth quarter worth $104,533,000. Proficio Capital Partners LLC bought a new position in Watsco during the fourth quarter valued at approximately $63,603,000. Finally, Charles Schwab Investment Management Inc. raised its holdings in Watsco by 9.5% during the fourth quarter. Charles Schwab Investment Management Inc. now owns 1,371,535 shares of the construction company’s stock valued at $649,957,000 after buying an additional 118,713 shares in the last quarter. Institutional investors own 89.71% of the company’s stock.

Watsco Trading Down 11.2 %

The company’s fifty day moving average is $501.02 and its 200-day moving average is $499.24. The firm has a market capitalization of $18.04 billion, a P/E ratio of 33.70 and a beta of 1.00.

Watsco Company Profile

Watsco, Inc, together with its subsidiaries, engages in the distribution of air conditioning, heating, refrigeration equipment, and related parts and supplies in the United States and internationally. The company distributes equipment, including residential ducted and ductless air conditioners, such as gas, electric, and oil furnaces; commercial air conditioning and heating equipment systems; and other specialized equipment.