Watsco Future Growth
Future criteria checks 2/6
Watsco is forecast to grow earnings and revenue by 16% and 6.6% per annum respectively. EPS is expected to grow by 15.9% per annum. Return on equity is forecast to be 21.1% in 3 years.
Key information
16.0%
Earnings growth rate
15.89%
EPS growth rate
| Trade Distributors earnings growth | 14.4% |
| Revenue growth rate | 6.6% |
| Future return on equity | 21.15% |
| Analyst coverage | Good |
| Last updated | 19 May 2026 |
Recent future growth updates
Recent updates
Seeking Alpha • 10h
Watsco: A Great Business That's Still Priced Expensively
Summary Watsco remains the leading HVAC distributor with a debt-free balance sheet, a robust technology platform, and a strong market position. Q1'26 results showed stabilization, not recovery, as HVAC equipment volumes trended from double-digit declines to flat, with price increases offsetting volume weakness. The A2L refrigerant transition and e-commerce growth are genuine tailwinds, but the current valuation at 30x forward earnings already prices in significant improvement. I rate WSO a Hold, as the stock's premium reflects anticipated recovery not yet evident in underlying demand, with consensus targets implying modest upside. Read the full article on Seeking AlphaAnalysis Article • May 16
Watsco's (NYSE:WSO) Weak Earnings May Only Reveal A Part Of The Whole Picture
Last week's earnings announcement from Watsco, Inc. ( NYSE:WSO ) was disappointing to investors, with a sluggish profit...
Narrative Update • May 06
WSO: Future Returns Will Reflect Peer Multiple Support And Home Depot Risks
Analysts have nudged the Watsco price target higher by about $8 to roughly $424, citing updated assumptions for revenue growth, profit margins and peer valuations, even as they apply a slightly higher discount rate and a lower future P/E multiple. Analyst Commentary Recent Street research around Watsco centers on valuation resets and how the stock trades relative to peers, especially after updates around large retail partners.
Narrative Update • Apr 21
WSO: Home Depot Deal Uncertainty Will Pressure Rich Dividend-Focused Sentiment
Analysts have raised their price targets on Watsco to a range of $400 to $425, reflecting updated assumptions on discount rates, modestly higher revenue growth, and slightly stronger profit margins, while some see the recent pullback as an overreaction to the Home Depot deal. Analyst Commentary Recent commentary around Watsco has centered on how the Home Depot agreement and shifting peer valuations filter into expectations for the stock.Narrative Update • Apr 06
WSO: Home Depot Partnership Reaction And Dividend Policy Will Shape Future Sentiment
Watsco's analyst price target has moved from an implied fair value of $335.92 to $362.00, as analysts factor in higher peer valuations, updated discount rates and P/E assumptions, and recent commentary that the 9% pullback following the Home Depot deal may have been an overreaction. Analyst Commentary Recent research has centered on how Watsco's valuation compares with peers and how to interpret the share move following the Home Depot partnership announcement.Narrative Update • Mar 23
WSO: Future Upside Will Emerge As Peer Multiple Support Strengthens
Analysts have lifted the Watsco price target by about $8, citing higher peer valuations and updated assumptions on growth, margins, discount rate, and future P/E as the main drivers of the change. Analyst Commentary Recent Street research on Watsco shows a mix of optimism and caution, with several price targets adjusted and ratings held at Neutral.
Narrative Update • Mar 09
WSO: Peer Repricing And Higher Dividend Will Support Fuller Future P/E Multiple
Analysts have raised their price targets on Watsco to a range of about $400 to $425, citing higher peer valuations and updated assumptions on discount rate, revenue growth, profit margin and future P/E in their models. Analyst Commentary Recent research updates on Watsco highlight a mix of views, with some price targets raised into the $400 to $425 range and others trimmed.Narrative Update • Feb 23
WSO: Peer Repricing And Dividend Increase Will Support Fuller Future P/E Multiple
Narrative Update on Watsco Our analyst price target for Watsco has been revised to $475 from $450. This reflects updated assumptions on growth, margins, and future P/E in the context of recent Street price target moves, where analysts have adjusted their views while citing shifts in peer valuations.Narrative Update • Feb 09
WSO: Mixed Street Views Will Shape Future P/E And Margin Expectations
Narrative Update Overview The updated analyst price target for Watsco reflects offsetting moves, with one firm lifting its target by $10 and another cutting by $90, as analysts reassess the company’s revenue growth, margins, discount rate, and assumed future P/E multiple. Analyst Commentary Recent research on Watsco reflects a split view, with some bullish analysts focusing on upside potential while others lean more cautious.Narrative Update • Jan 25
WSO: Mixed Street Views Will Set Stage For Future Premium P/E
Analysts now set their fair value estimate for Watsco at $450, down $10 from $460. This reflects updated views on its long term P/E assumption, modest tweaks to revenue growth and margin forecasts, and the mixed shifts in recent price targets from firms on the Street.Narrative Update • Jan 11
WSO: Softer HVAC Surveys May Set Stage For Future Rebound
Analysts have trimmed their fair value estimate for Watsco to about $460 from around $550, citing softer HVAC survey readings that point to potential earnings pressure over the next couple of quarters and a less robust outlook for revenue growth and margins. At the same time, they are applying a higher discount rate and assuming a richer future P/E multiple.Narrative Update • Dec 26
WSO: Long-Term Upside Will Emerge As Southern Demand Headwinds Ease
Analysts modestly lowered their price target on Watsco to approximately $406.60 per share from prior expectations of stronger upside, citing softer HVAC demand, rising earnings risk over the next two quarters, and tighter profit margins, despite a slightly lower discount rate and a higher assumed future valuation multiple. Analyst Commentary Recent commentary from Street research has turned more cautious on Watsco, with sentiment shifting toward a wait and see stance ahead of upcoming quarterly results.Narrative Update • Dec 12
WSO: Long-Term Fundamentals Will Outweigh Near-Term Southern Demand And Earnings Pressures
Analysts have trimmed their price target on Watsco by about 1 percent, or roughly $2. This reflects a slightly higher discount rate and modestly lower fair value assumptions amid increased near term earnings risk.Narrative Update • Nov 28
WSO: Long-Term Fundamentals Will Offset Near-Term Demand Weakness In South
Analysts have lowered their fair value price target for Watsco from $415.60 to $408.90. This change is attributed to ongoing demand risks and softer earnings projections reflected in recent research updates.Analysis Article • Nov 11
Watsco, Inc. Just Missed Earnings - But Analysts Have Updated Their Models
Watsco, Inc. ( NYSE:WSO ) just released its latest quarterly report and things are not looking great. Results look to...Narrative Update • Nov 09
WSO: Market Position And Efficiency Initiatives Will Support Long-Term Upside
Analysts have lowered their price target for Watsco from $437.80 to $415.60. They cite concerns over softer HVAC demand and increased earnings risk in the coming quarters.Narrative Update • Oct 26
Earnings Risk And Weaker Demand Trends Will Shape Future Outlook
Analysts have lowered their price target for Watsco, reducing it from $445 to $437.80. They cite recent survey data that signals weaker demand and a more challenging near-term outlook for the company.Narrative Update • Oct 12
A2L Transition And HVAC Replacement Will Strengthen Future Prospects
Narrative Update on Watsco Price Target Analysts have lowered their price target for Watsco, reducing it from $450 to $425. They cite expectations of slower profit margin growth and slightly lower fair value estimates, even though there are improved revenue growth projections and a marginally lower discount rate.Analysis Article • Sep 29
Why You Should Care About Watsco's (NYSE:WSO) Strong Returns On Capital
If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an...Narrative Update • Sep 28
A2L Transition And HVAC Replacement Will Strengthen Future Prospects
The decrease in Watsco’s consensus analyst price target is primarily driven by a modest reduction in its future P/E multiple, with fair value now set at $453.40. Valuation Changes Summary of Valuation Changes for Watsco The Consensus Analyst Price Target has fallen slightly from $464.45 to $453.40.Narrative Update • Sep 13
A2L Transition And HVAC Replacement Will Strengthen Future Prospects
Watsco’s consensus Analyst Price Target saw a marginal decrease, reflecting minimal changes in both the company’s future P/E and discount rate, with fair value moving slightly from $468.64 to $464.45. What's in the News Watsco, Inc.Analysis Article • Jul 21
What You Can Learn From Watsco, Inc.'s (NYSE:WSO) P/E
With a price-to-earnings (or "P/E") ratio of 36.3x Watsco, Inc. ( NYSE:WSO ) may be sending very bearish signals at the...Analysis Article • Jun 14
Why The 21% Return On Capital At Watsco (NYSE:WSO) Should Have Your Attention
If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Firstly, we'd...Seeking Alpha • Mar 07
Watsco Is Primed For A Growth Acceleration, And I'm Buying More
Summary Watsco's Q4 results were exceptional, with record sales, expanded margins, and new customer growth, signaling strong future growth potential. The company benefits from long-term tailwinds, regulatory changes, and a strong moat, making it well-positioned for sustained demand and continued market share gains. Watsco's dividend increase by 11% and robust free cash flow growth underscore its commitment to delivering shareholder value and confidence in future performance. Despite potential risks like tariffs and economic uncertainty, Watsco's strategic positioning and operating leverage make it a buy for long-term investors. Read the full article on Seeking AlphaSeeking Alpha • Oct 31
Watsco: Primed For Market-Beating Returns Following Q3 Earnings
Summary Watsco reported mixed Q3 results, but sees a stabilizing HVAC equipment market and reason for optimism. The company expects pricing and volumes to increase due to new regulatory requirements. Watsco's moat is strong, and the company continues to take market share. The stock appears undervalued thanks to WSO's long-term free cash flow growth potential. I rate WSO as a buy. Read the full article on Seeking AlphaSeeking Alpha • Sep 21
Watsco: Good Growth Prospects, But Premium Valuation Limits Upside
Summary Watsco, Inc. is poised for growth due to technology investments, e-commerce expansion, and favorable HVAC/R industry trends driven by regulatory mandates and tax credits. Despite near-term margin headwinds from A2L refrigerant transition, long-term margins should benefit from higher-efficiency products and SG&A cost management. The stock trades at a significant premium, suggesting growth prospects are already priced in, leading to a neutral rating. Read the full article on Seeking AlphaSeeking Alpha • Jul 07
Watsco: Overoptimistic Margin Expectations
Summary Watsco is a market leader in the U.S. with a 12% market share with no disruption expected. Network effects create significant barriers to entry, and the industry will continue its consolidation into fewer distributors of HVAC products. The current CEO has led Watsco for 51 years and owns 11.2% of the company. Analyst estimates are too optimistic. Margins might decrease as inflation eases due to the first-in first-out accounting method used. I consider WSO stock to be overvalued by 23%, but will keep it in my watchlist due to its high quality. Read the full article on Seeking AlphaSeeking Alpha • Mar 07
Watsco: A Fantastic Dividend Compounder I Just Put On My Watchlist
Summary Watsco Inc. is an industrial distribution giant in the HVAC/R industry, providing products and services in the commercial and residential market. The company focuses on recurring revenue business and avoids competition with HVAC producers by offering technical support, efficient delivery services, and convenient online platforms. Watsco has experienced rapid growth in a highly fragmented market, with impressive revenue and profitability improvements over the years. Read the full article on Seeking AlphaEarnings and Revenue Growth Forecasts
| Date | Revenue | Earnings | Free Cash Flow | Cash from Op | Avg. No. Analysts |
|---|---|---|---|---|---|
| 12/31/2028 | 8,273 | 632 | 672 | 719 | 5 |
| 12/31/2027 | 7,857 | 534 | 606 | 663 | 10 |
| 12/31/2026 | 7,493 | 488 | 670 | 722 | 10 |
| 3/31/2026 | 7,241 | 462 | 694 | 728 | N/A |
| 12/31/2025 | 7,239 | 464 | 535 | 570 | N/A |
| 9/30/2025 | 7,414 | 485 | 517 | 549 | N/A |
| 6/30/2025 | 7,508 | 494 | 394 | 427 | N/A |
| 3/31/2025 | 7,584 | 492 | 460 | 492 | N/A |
| 12/31/2024 | 7,618 | 499 | 743 | 773 | N/A |
| 9/30/2024 | 7,468 | 486 | 661 | 693 | N/A |
| 6/30/2024 | 7,434 | 485 | 781 | 813 | N/A |
| 3/31/2024 | 7,298 | 477 | 679 | 713 | N/A |
| 12/31/2023 | 7,284 | 499 | 526 | 562 | N/A |
| 9/30/2023 | 7,262 | 551 | 442 | 476 | N/A |
| 6/30/2023 | 7,171 | 535 | 377 | 410 | N/A |
| 3/31/2023 | 7,301 | 549 | 591 | 626 | N/A |
| 12/31/2022 | 7,274 | 550 | 536 | 572 | N/A |
| 9/30/2022 | 7,205 | 493 | 354 | 389 | N/A |
| 6/30/2022 | 6,952 | 478 | 307 | 341 | N/A |
| 3/31/2022 | 6,668 | 434 | 257 | 286 | N/A |
| 12/31/2021 | 6,280 | 382 | 324 | 350 | N/A |
| 9/30/2021 | 5,923 | 352 | 460 | 481 | N/A |
| 6/30/2021 | 5,677 | 321 | 336 | 355 | N/A |
| 3/31/2021 | 5,183 | 270 | 437 | 455 | N/A |
| 12/31/2020 | 5,055 | 246 | 518 | 534 | N/A |
| 9/30/2020 | 4,973 | 239 | 496 | 511 | N/A |
| 6/30/2020 | 4,831 | 218 | 512 | 529 | N/A |
| 3/31/2020 | 4,847 | 220 | 307 | 325 | N/A |
| 12/31/2019 | 4,770 | 226 | N/A | 336 | N/A |
| 9/30/2019 | 4,689 | 228 | N/A | 298 | N/A |
| 6/30/2019 | 4,590 | 224 | N/A | 258 | N/A |
| 3/31/2019 | 4,551 | 224 | N/A | 265 | N/A |
| 12/31/2018 | 4,547 | 223 | N/A | 171 | N/A |
| 9/30/2018 | 4,520 | 226 | N/A | 187 | N/A |
| 6/30/2018 | 4,453 | 213 | N/A | 252 | N/A |
| 3/31/2018 | 4,396 | 199 | N/A | 231 | N/A |
| 12/31/2017 | 4,342 | 191 | N/A | 307 | N/A |
| 9/30/2017 | 4,291 | 178 | N/A | 325 | N/A |
| 6/30/2017 | 4,303 | 177 | N/A | 275 | N/A |
| 3/31/2017 | 4,241 | 168 | N/A | 274 | N/A |
| 12/31/2016 | 4,221 | 168 | N/A | 282 | N/A |
| 9/30/2016 | 4,211 | 165 | N/A | 268 | N/A |
| 6/30/2016 | 4,147 | 161 | N/A | 337 | N/A |
| 3/31/2016 | 4,156 | 161 | N/A | 280 | N/A |
| 12/31/2015 | 4,113 | 159 | N/A | 223 | N/A |
| 9/30/2015 | 4,086 | 157 | N/A | 203 | N/A |
| 6/30/2015 | 4,044 | 154 | N/A | 136 | N/A |
Analyst Future Growth Forecasts
Earnings vs Savings Rate: WSO's forecast earnings growth (16% per year) is above the savings rate (3.5%).
Earnings vs Market: WSO's earnings (16% per year) are forecast to grow slower than the US market (16.8% per year).
High Growth Earnings: WSO's earnings are forecast to grow, but not significantly.
Revenue vs Market: WSO's revenue (6.6% per year) is forecast to grow slower than the US market (11.6% per year).
High Growth Revenue: WSO's revenue (6.6% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: WSO's Return on Equity is forecast to be high in 3 years time (21.1%)
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Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2026/05/20 05:35 |
| End of Day Share Price | 2026/05/20 00:00 |
| Earnings | 2026/03/31 |
| Annual Earnings | 2025/12/31 |
Data Sources
The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.
| Package | Data | Timeframe | Example US Source * |
|---|---|---|---|
| Company Financials | 10 years |
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| Analyst Consensus Estimates | +3 years |
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| Market Prices | 30 years |
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| Ownership | 10 years |
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| Management | 10 years |
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| Key Developments | 10 years |
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* Example for US securities, for non-US equivalent regulatory forms and sources are used.
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.
Analysis Model and Snowflake
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Industry and Sector Metrics
Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.
Analyst Sources
Watsco, Inc. is covered by 30 analysts. 10 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.
| Analyst | Institution |
|---|---|
| David Manthey | Baird |
| Scott Davis | Barclays |
| Owen Flanagan | Cleveland Research Company |