Watsco Inc Dossier
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SectorIndustrials IndustryIndustrial Distribution Beta (adjusted)1.03 Intrinsic Value $370.65median of 6 methods · middle span $252-$388based on filings through 30 Jun 2026 Market Price $302.69Price as of 30 Sep 2026 UndervaluedIntrinsic value is 22% above the market price −50% · IV below pricenear fair value ±15%IV above price · +50% Data confidence Sign in to view data confidence Market Cap $12.5B Enterprise Value $12.5B Shares Outstanding 38.1M diluted Moat Rating Wide Next Earnings Date27 Oct 2026 Last ex-dividend16 Jul 2026 All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference. ThesisStreet consensus, scenarios, merits, risks, and invalidation triggers Thesis Summary Watsco offers exposure to a fragmented, replacement-driven HVAC/R distribution market through a scaled platform, a debt-free balance sheet, acquisitions and expanding digital adoption. Second-quarter 2026 revenue increased 2%, domestic residential HVAC equipment sales increased 5%, and e-commerce sales grew 13%, indicating improving demand and continued digital share gains. The principal near-term limitation is earnings quality: quarterly gross margin fell to 27.5%, operating margin to 11.3%, and EPS declined 12%. The investment case therefore depends on demand stabilization, integration of Jackson Supply, sustained digital growth and margin stabilization rather than an immediate return to prior peak profitability. This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today. Street view · analyst 12-month targets Low · most bearish analyst$330.00 Mean target$382.20 High · most bullish analyst$485.00 Our research · scenarios, merits, risks, and invalidation triggersResearch as of 2 Sep 2026 Scenarios · 12-month scenario targets Bear CaseDownside scenario $280.0021% Residential HVAC demand weakens, gross margin falls below its normalized range, inventory again exceeds the prior transition-period peak and Jackson Supply integration fails to offset lower organic profitability. Dividend growth slows as weaker earnings and working-capital absorption reduce financial flexibility. Base CaseCentral scenario $382.2056% Matches the consensus meanEnd-market conditions improve gradually, Jackson Supply contributes incremental growth, e-commerce penetration continues rising, and gross margin stabilizes near recent underlying levels. Operating leverage returns only gradually because pricing benefits normalize and technology investment continues. Bull CaseUpside scenario $470.0023% Residential replacement demand accelerates, Jackson Supply expands Watsco's Sunbelt density, e-commerce continues to materially outgrow total revenue, and gross margin recovers as product-transition distortions subside. Strong liquidity and no debt allow further acquisitions and continued dividend growth. Scenarios are anchored to street consensus at the research date, with our probabilities and rationale. Key Investment Merits
Key Investment Risks
All scenarios are estimates and subject to change. Past performance is not indicative of future results. Quality Pillars MembersThis section is available to registered members. Create a free account or sign in to unlock the full breakdown. Explore this dossierValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework. |