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↓Deteriorating
- Dividend Payout Sustainability↓Deteriorating
- Operational Quality Resilience→Stable
- +1 more pillar — see the Why tab for full reasoning
Pillars as of Jul 3, 2026, based on the 10-K filed Feb 27, 2026· older than 90 days
Watsco, Inc. (WSO) Stock Analysis
Recovery setup
Industrials · Industrial Distribution
Sell if holding. Analyst target reached at $311.69 — A.R:R is negative (-0.2) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Sector modifier (Industrials): -0.7.
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 $311.69 — A.R:R is negative (-0.2) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Sector modifier (Industrials): -0.7. Chart setup: Death cross but MACD improving, RSI 59. Score 4.9/10, moderate confidence.
Passes 6/9 gates (positive momentum, clean insider activity, news events none recent, earnings proximity 104d clear, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio. Suitability: moderate.
Recent developments
updated Oct 28, 2026Recent Developments — Watsco, Inc.
Material events (past 30 days)
- 8K Oct 27, 2026 MEDIUM Item 1.02: Florida | 1-5581 | 59-0778222 (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | | | | 2665 South Bayshore Drive Suite 901 | Miami, Florida | | 33133 (Address of Principal Executive Offices) | | (Zip Code) --- Registrant's Telephone Num...
Latest news
- NEWS Robert W. Baird Analyst Adjusts Watsco Price Target — fiscal.ai Oct 28, 2026 neutral
- NEWS Watsco (WSO) Stock Slips After Q3 Results Put Margins In Focus - Yahoo Finance — Yahoo Finance Oct 28, 2026 negative
- NEWS Watsco Stock Slides After Q3 2026 Earnings Miss Estimates - AlphaStreet — AlphaStreet Oct 27, 2026 negative
- NEWS Why Watsco (WSO) shares are falling today - TradingView — TradingView Oct 27, 2026 negative
- NEWS Why Watsco (WSO) shares are falling today - The Chronicle-Journal — The Chronicle-Journal Oct 27, 2026 negative
Latest item Oct 28, 2026 · Generated 2026-11-04T12:04:37Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Material Events(8-K, last 90d)
- 2026-10-27Item 1.02MEDIUMFlorida | 1-5581 | 59-0778222 (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | | | | 2665 South Bayshore Drive Suite 901 | Miami, Florida | | 33133 (Address of Principal Executive Offices) | | (Zip Code) --- Registrant's Telephone Num...SEC filing →
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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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
Technicals below the gate floor. Component breakdown shows what dragged the score down.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Analyst target reached at $311.69 — A.R:R is negative (-0.2) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Sector modifier (Industrials): -0.7. Chart setup: Death cross but MACD improving, RSI 59. Prior stop was $289.87. Score 4.9/10, moderate confidence.
Analyst target $302.50 reached (−2.9% from $311.69); no take-profit level is published. Prior stop was $289.87. Stop-loss: $289.87.
Analyst target reached - limited upside remaining; Sector modifier (Industrials): -0.7; Consecutive earnings misses (3).
Watsco, Inc. trades at a P/E of 29.4 (forward 24.2). TrendMatrix value score: 5.0/10. Verdict: Sell.
22 analysts rate WSO, with a consensus score of 2.8/5. 10 analysts publish price targets averaging $348.
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.