Watsco is an HVAC distribution business with a strong Piotroski score of 7/9 and solid free cash flow quality, but three consecutive earnings misses, analyst estimates trending down 16% over 30 days, and a dividend payout ratio of 343% create a fragile income and earnings outlook.
Thesis pillars
- Earnings Miss Streak→Stable
- Dividend Payout Sustainability→Stable
- Operational Quality Resilience→Stable
- +1 more pillar — see the Why tab for full reasoning
Watsco, Inc. (WSO) Stock Analysis
Range Bound setup
Industrials · Industrial Distribution
Sell if holding. Analyst target reached at $399.06 — A.R:R is negative (-0.9) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Consecutive earnings misses (3).
Watsco, Inc. and its subsidiaries (collectively, "Watsco," the "Company", or "we," "us," or "our") was incorporated in Florida in 1956 and is the largest distributor of air conditioning, heating and refrigeration equipment and related parts and supplies ("HVAC/R") in the HVAC/R... Read more
Sell if holding. Analyst target reached at $399.06 — A.R:R is negative (-0.9) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Consecutive earnings misses (3). Chart setup: RSI 60 mid-range, Bollinger mid-band. Score 4.4/10, moderate confidence.
Passes 7/9 gates (positive momentum, clean insider activity, no SEC red flags, news events none recent, earnings proximity 23d clear, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio. Suitability: moderate.
Recent developments
updated 2026-07-07Recent Developments — Watsco, Inc.
Latest news
- NEWS WSO (Watsco Inc.) shares rise nearly 2 percent despite posting a wider than expected Q4 2025 EPS miss. - Cổng thông tin — Cổng thông tin điện tử Tỉnh Sơn La negative
- NEWS M&T Bank Corp Increases Stock Holdings in Watsco, Inc. $WSO - MarketBeat — MarketBeat neutral
- NEWS Earnings Preview: Watsco (WSO) Q1 Earnings Expected to Decline - Yahoo Finance — Yahoo Finance negative
- NEWS Watsco (WSO) Expected to Announce Earnings on Tuesday - MarketBeat — MarketBeat neutral
- NEWS AEGON ASSET MANAGEMENT UK Plc Sells 7,187 Shares of Watsco, Inc. $WSO - MarketBeat — MarketBeat neutral
Generated 2026-07-07T11:31:44Z.
Upcoming dated catalysts
Thesis
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Quality Signals
Options Flow
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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Rating Breakdown
3 floor-breakers
Growth below the gate floor. Component breakdown shows what dragged the score down.static
No near-term catalyst priced in. Thesis progression will come from fundamentals grinding, not event reaction.static
Ranks in the bottom of its industry peers on the composite signal. Better names in the same sector exist.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Analyst target reached at $399.06 — A.R:R is negative (-0.9) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Consecutive earnings misses (3). Chart setup: RSI 60 mid-range, Bollinger mid-band. Prior stop was $375.48. Score 4.4/10, moderate confidence.
Take-profit target: $412.48 (+3.4% upside). Prior stop was $375.48. Stop-loss: $375.48.
Analyst target reached - limited upside remaining; Consecutive earnings misses (3); Weak overall score: 4.4/10.
Watsco, Inc. trades at a P/E of 33.2 (forward 29.2). TrendMatrix value score: 4.3/10. Verdict: Sell.
23 analysts cover WSO with a consensus score of 2.8/5. Average price target: $423.
What does Watsco, Inc. do?Watsco, Inc. and its subsidiaries (collectively, "Watsco," the "Company", or "we," "us," or "our") was incorporated in...
Watsco, Inc. and its subsidiaries (collectively, "Watsco," the "Company", or "we," "us," or "our") was incorporated in Florida in 1956 and is the largest distributor of air conditioning, heating and refrigeration equipment and related parts and supplies ("HVAC/R") in the HVAC/R distribution industry in North America. At December 31, 2025, we operated from 695 locations in 43 U.S.