Watsco (WSO) Raised to “Buy” at Zacks Investment Research

Zacks Investment Research upgraded shares of Watsco (NYSE:WSO) from a hold rating to a buy rating in a report issued on Monday morning. Zacks Investment Research currently has $205.00 price objective on the construction company’s stock.

According to Zacks, “Watsco continues to transform its business into the digital age by investing in scalable platforms for mobile apps, e-commerce, business intelligence and supply-chain optimization. Its technology continues to evolve and make progress. Currently e-commerce sales generate 25% of its revenues. Further, its focus on strategic acquisitions, cost-cutting initiatives and growth potential in the replacement market are likely to drive growth. Watsco will also benefit from the U.S. tax reform. The company’s sound balance sheet positions it well to invest and capitalize on long-term growth opportunities. Its estimates have been going up over the past 90 days. Moreover, the company has outperformed the industry over the past year.”

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WSO has been the subject of a number of other research reports. JPMorgan Chase cut their price target on shares of Watsco from $180.00 to $169.00 and set a neutral rating for the company in a report on Monday, February 12th. Stephens set a $169.00 price target on shares of Watsco and gave the company a hold rating in a report on Thursday, February 8th. Susquehanna Bancshares set a $195.00 price target on shares of Watsco and gave the company a buy rating in a report on Friday, February 9th. Stifel Nicolaus reiterated a buy rating and issued a $191.00 price target on shares of Watsco in a report on Wednesday, April 4th. Finally, ValuEngine upgraded shares of Watsco from a hold rating to a buy rating in a report on Monday, April 2nd. One research analyst has rated the stock with a sell rating, four have given a hold rating and seven have given a buy rating to the company’s stock. Watsco currently has an average rating of Buy and an average target price of $176.00.

Shares of WSO opened at $186.63 on Monday. The company has a quick ratio of 1.38, a current ratio of 3.21 and a debt-to-equity ratio of 0.01. The stock has a market capitalization of $6,842.29, a PE ratio of 34.06 and a beta of 0.82. Watsco has a 52-week low of $134.08 and a 52-week high of $189.72.

Watsco (NYSE:WSO) last announced its quarterly earnings results on Thursday, February 8th. The construction company reported $0.90 earnings per share (EPS) for the quarter, missing the Zacks’ consensus estimate of $1.00 by ($0.10). The company had revenue of $964.35 million during the quarter, compared to analysts’ expectations of $965.85 million. Watsco had a net margin of 4.80% and a return on equity of 14.66%. The business’s revenue for the quarter was up 5.6% compared to the same quarter last year. During the same quarter in the prior year, the business earned $0.81 EPS. equities research analysts forecast that Watsco will post 6.81 EPS for the current fiscal year.

The firm also recently announced a quarterly dividend, which will be paid on Monday, April 30th. Shareholders of record on Monday, April 16th will be issued a dividend of $1.45 per share. This is an increase from Watsco’s previous quarterly dividend of $1.25. This represents a $5.80 annualized dividend and a yield of 3.11%. The ex-dividend date is Friday, April 13th. Watsco’s dividend payout ratio (DPR) is 91.24%.

Large investors have recently bought and sold shares of the business. Krueger & Catalano Capital Partners LLC purchased a new position in Watsco during the 4th quarter valued at about $2,047,000. Zurcher Kantonalbank Zurich Cantonalbank increased its holdings in Watsco by 35.5% during the 4th quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 1,816 shares of the construction company’s stock valued at $309,000 after acquiring an additional 476 shares in the last quarter. Bain Capital Public Equity Management LLC purchased a new position in Watsco during the 4th quarter valued at about $6,422,000. BlackRock Inc. increased its holdings in Watsco by 4.1% during the 4th quarter. BlackRock Inc. now owns 2,682,903 shares of the construction company’s stock valued at $456,201,000 after acquiring an additional 105,677 shares in the last quarter. Finally, Legal & General Group Plc increased its holdings in Watsco by 9.3% during the 3rd quarter. Legal & General Group Plc now owns 33,618 shares of the construction company’s stock valued at $5,414,000 after acquiring an additional 2,872 shares in the last quarter. Hedge funds and other institutional investors own 81.56% of the company’s stock.

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About Watsco

Watsco, Inc is a distributor of air conditioning, heating and refrigeration equipment, and related parts and supplies (HVAC/R) in the HVAC/R distribution industry in North America. As of December 31, 2016, the Company sold a range of non-equipment products, representing more than 300,000 stock keeping units, including parts, ductwork, air movement products, insulation, tools, installation supplies, thermostats and air quality products.

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