Zacks Research Has Negative Outlook for Watsco Q1 Earnings

Watsco, Inc. (NYSE:WSO) – Equities research analysts at Zacks Research reduced their Q1 2026 earnings per share (EPS) estimates for shares of Watsco in a report issued on Tuesday, March 10th. Zacks Research analyst Team now forecasts that the construction company will post earnings per share of $1.74 for the quarter, down from their prior forecast of $2.00. Zacks Research currently has a “Hold” rating on the stock. The consensus estimate for Watsco’s current full-year earnings is $14.62 per share. Zacks Research also issued estimates for Watsco’s Q2 2026 earnings at $4.27 EPS, Q3 2026 earnings at $4.22 EPS, Q4 2026 earnings at $2.14 EPS, Q1 2027 earnings at $1.89 EPS, Q2 2027 earnings at $4.74 EPS, Q3 2027 earnings at $4.77 EPS, Q4 2027 earnings at $2.42 EPS, FY2027 earnings at $13.83 EPS and FY2028 earnings at $15.63 EPS.

Watsco (NYSE:WSO) last announced its quarterly earnings data on Tuesday, February 17th. The construction company reported $1.68 EPS for the quarter, missing the consensus estimate of $1.94 by ($0.26). The firm had revenue of $1.58 billion for the quarter, compared to analysts’ expectations of $1.62 billion. Watsco had a net margin of 6.87% and a return on equity of 15.49%. The business’s quarterly revenue was down 9.9% compared to the same quarter last year. During the same period in the prior year, the business posted $2.37 EPS.

A number of other research firms also recently issued reports on WSO. UBS Group began coverage on Watsco in a research note on Monday, January 5th. They issued a “neutral” rating and a $370.00 price target on the stock. Mizuho set a $425.00 price objective on shares of Watsco in a research report on Wednesday, February 18th. Morgan Stanley cut their price target on shares of Watsco from $460.00 to $370.00 and set an “equal weight” rating on the stock in a report on Wednesday, January 14th. JPMorgan Chase & Co. upped their price target on shares of Watsco from $370.00 to $400.00 and gave the stock a “neutral” rating in a report on Thursday, February 19th. Finally, Wolfe Research set a $349.00 target price on Watsco in a research report on Tuesday, December 9th. One investment analyst has rated the stock with a Buy rating and eight have issued a Hold rating to the company’s stock. According to MarketBeat, Watsco has a consensus rating of “Hold” and an average target price of $409.00.

Watsco Price Performance

Shares of NYSE WSO opened at $379.47 on Wednesday. Watsco has a 1 year low of $323.05 and a 1 year high of $521.70. The firm has a 50-day moving average of $392.02 and a 200 day moving average of $377.04. The stock has a market cap of $15.39 billion, a P/E ratio of 31.33 and a beta of 1.03.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently bought and sold shares of WSO. Torren Management LLC purchased a new stake in Watsco during the 4th quarter valued at about $26,000. Bayban purchased a new position in shares of Watsco during the 4th quarter worth $29,000. SJS Investment Consulting Inc. increased its position in shares of Watsco by 2,366.7% during the third quarter. SJS Investment Consulting Inc. now owns 74 shares of the construction company’s stock valued at $30,000 after acquiring an additional 71 shares during the last quarter. TD Waterhouse Canada Inc. raised its position in Watsco by 242.9% in the second quarter. TD Waterhouse Canada Inc. now owns 72 shares of the construction company’s stock valued at $33,000 after purchasing an additional 51 shares during the period. Finally, Bamco Inc. NY acquired a new position in Watsco during the 4th quarter worth about $35,000. 89.71% of the stock is owned by hedge funds and other institutional investors.

Watsco Announces Dividend

The firm also recently announced a quarterly dividend, which was paid on Friday, January 30th. Stockholders of record on Friday, January 16th were given a dividend of $3.00 per share. The ex-dividend date was Friday, January 16th. This represents a $12.00 dividend on an annualized basis and a dividend yield of 3.2%. Watsco’s dividend payout ratio (DPR) is 99.09%.

More Watsco News

Here are the key news stories impacting Watsco this week:

• Positive Sentiment: Short interest fell 12.4% to 3.08M shares as of Feb. 27, lowering the short-interest ratio to ~7.8 days and removing some downside pressure from crowded bearish bets.
• Positive Sentiment: Zacks raised several later-period estimates and long-range outlooks — including Q3 2027 (to $4.77), Q4 2027 (to $2.42) and FY2028 (to $15.63) — signaling upside to 2027–2028 earnings expectations even as near-term estimates move around.
• Positive Sentiment: Bullish coverage highlighting Watsco as an undervalued HVAC/R player with strong dividend-growth potential may support buyer interest for long-term investors. Article Title
• Neutral Sentiment: Zacks continues to carry a “Hold” rating on WSO; its revisions are mixed across quarters, so analyst sentiment is not turning uniformly bullish or bearish at this stage.
• Negative Sentiment: Zacks cut several near-term forecasts and trimmed FY2027: Q1 2026 to $1.74 (from $2.00), Q2 2026 to $4.27 (from $4.53), Q3 2026 to $4.22 (from $4.27), Q1 2027 to $1.89 (from $2.07), Q2 2027 to $4.74 (from $4.97) and lowered FY2027 to $13.83 (from $13.95). These downgrades increase near-term earnings risk and likely weigh on the stock today.
• Negative Sentiment: Negative media coverage arguing reasons to avoid WSO could amplify short-term selling pressure from momentum or retail investors. Article Title

Watsco Company Profile

Watsco, Inc is the largest distributor of heating, ventilation, air conditioning and refrigeration (HVAC/R) equipment, parts and supplies in the United States. Headquartered in Miami, Florida, the company operates a network of more than 600 branches across the continental U.S., Canada and Puerto Rico. Watsco serves residential and commercial contractors by providing essential components for climate control systems, including air conditioners, furnaces, heat pumps, coils, refrigerants, controls and electrical and piping supplies.

Founded in 1947, Watsco has grown from a single regional distributor into an industry leader through a combination of organic expansion, acquisitions and strategic partnerships with original equipment manufacturers such as Carrier, Trane, Goodman and Lennox.