Watts Water Technologies, Inc. Just Recorded A 15% EPS Beat: Here's What Analysts Are Forecasting Next

Watts Water Technologies, Inc. (NYSE:WTS) investors will be delighted, with the company turning in some strong numbers with its latest results. Watts Water Technologies beat earnings, with revenues hitting US$644m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 15%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the eight analysts covering Watts Water Technologies are now predicting revenues of US$2.34b in 2025. If met, this would reflect a credible 2.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 5.0% to US$9.81. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.30b and earnings per share (EPS) of US$9.25 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

See our latest analysis for Watts Water Technologies

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 9.5% to US$273. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Watts Water Technologies at US$300 per share, while the most bearish prices it at US$225. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Watts Water Technologies' revenue growth is expected to slow, with the forecast 5.0% annualised growth rate until the end of 2025 being well below the historical 8.7% p.a. growth over the last five years. Compare this to the 190 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.7% per year. So it's pretty clear that, while Watts Water Technologies' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Watts Water Technologies following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Watts Water Technologies analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Watts Water Technologies .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.