William Blair Issues Pessimistic Outlook for Watsco Earnings

Watsco, Inc. (NYSE:WSO) – Analysts at William Blair lowered their Q4 2025 earnings per share (EPS) estimates for shares of Watsco in a note issued to investors on Wednesday, July 30th. William Blair analyst R. Merkel now expects that the construction company will post earnings of $2.23 per share for the quarter, down from their prior estimate of $2.55. The consensus estimate for Watsco’s current full-year earnings is $14.62 per share. William Blair also issued estimates for Watsco’s Q2 2026 earnings at $4.19 EPS, Q3 2026 earnings at $4.71 EPS, Q4 2026 earnings at $2.48 EPS, FY2026 earnings at $13.73 EPS and FY2027 earnings at $15.55 EPS.

Watsco (NYSE:WSO) last issued its earnings results on Wednesday, July 30th. The construction company reported $4.52 earnings per share for the quarter, missing analysts’ consensus estimates of $4.84 by ($0.32). Watsco had a return on equity of 16.96% and a net margin of 7.08%. The business had revenue of $2.06 billion during the quarter, compared to analysts’ expectations of $2.24 billion. During the same period last year, the firm posted $4.49 EPS. Watsco’s quarterly revenue was down 3.6% compared to the same quarter last year.

A number of other equities analysts have also weighed in on the company. JPMorgan Chase & Co. boosted their target price on Watsco from $445.00 to $460.00 and gave the stock a “neutral” rating in a research report on Tuesday, May 27th. UBS Group cut their price target on Watsco from $455.00 to $450.00 and set a “neutral” rating for the company in a research note on Wednesday, June 25th. Wall Street Zen upgraded Watsco from a “sell” rating to a “hold” rating in a research note on Friday, May 9th. Mizuho set a $490.00 price target on Watsco in a research note on Thursday, April 24th. Finally, Morgan Stanley set a $505.00 price target on Watsco in a research note on Wednesday, July 2nd. Seven investment analysts have rated the stock with a hold rating and one has given a buy rating to the company. According to MarketBeat, Watsco presently has an average rating of “Hold” and an average target price of $484.17.

Watsco Stock Performance

Shares of NYSE:WSO opened at $434.42 on Monday. Watsco has a fifty-two week low of $418.31 and a fifty-two week high of $571.41. The business has a 50-day simple moving average of $452.11 and a two-hundred day simple moving average of $476.49. The firm has a market cap of $17.60 billion, a price-to-earnings ratio of 33.31 and a beta of 0.95.

Watsco Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Thursday, July 31st. Investors of record on Wednesday, July 16th were paid a dividend of $3.00 per share. The ex-dividend date was Wednesday, July 16th. This represents a $12.00 dividend on an annualized basis and a dividend yield of 2.8%. Watsco’s payout ratio is 92.02%.

Institutional Inflows and Outflows

A number of hedge funds have recently made changes to their positions in the stock. Redmond Asset Management LLC grew its stake in shares of Watsco by 4.4% during the 2nd quarter. Redmond Asset Management LLC now owns 17,030 shares of the construction company’s stock valued at $7,521,000 after acquiring an additional 716 shares during the period. Fjarde AP Fonden Fourth Swedish National Pension Fund grew its stake in shares of Watsco by 97.5% during the 2nd quarter. Fjarde AP Fonden Fourth Swedish National Pension Fund now owns 9,519 shares of the construction company’s stock valued at $4,204,000 after acquiring an additional 4,700 shares during the period. Teacher Retirement System of Texas grew its stake in shares of Watsco by 3.8% during the 2nd quarter. Teacher Retirement System of Texas now owns 5,286 shares of the construction company’s stock valued at $2,334,000 after acquiring an additional 194 shares during the period. Y Intercept Hong Kong Ltd grew its stake in shares of Watsco by 75.8% during the 2nd quarter. Y Intercept Hong Kong Ltd now owns 983 shares of the construction company’s stock valued at $434,000 after acquiring an additional 424 shares during the period. Finally, Bessemer Group Inc. grew its stake in shares of Watsco by 78.3% during the 2nd quarter. Bessemer Group Inc. now owns 601 shares of the construction company’s stock valued at $265,000 after acquiring an additional 264 shares during the period. 89.71% of the stock is currently owned by institutional investors.

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.