Watts Water Technologies, Inc. Just Recorded A 5.6% EPS Beat: Here's What Analysts Are Forecasting Next

Last week saw the newest third-quarter earnings release from Watts Water Technologies, Inc. (NYSE:WTS), an important milestone in the company's journey to build a stronger business. Watts Water Technologies reported US$544m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$2.06 beat expectations, being 5.6% higher than what the analysts expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Watts Water Technologies

After the latest results, the eight analysts covering Watts Water Technologies are now predicting revenues of US$2.31b in 2025. If met, this would reflect a credible 2.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 6.7% to US$8.94. In the lead-up to this report, the analysts had been modelling revenues of US$2.32b and earnings per share (EPS) of US$8.93 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$195, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Watts Water Technologies analyst has a price target of US$207 per share, while the most pessimistic values it at US$175. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Watts Water Technologies is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Watts Water Technologies' past performance and to peers in the same industry. We would highlight that Watts Water Technologies' revenue growth is expected to slow, with the forecast 1.6% annualised growth rate until the end of 2025 being well below the historical 8.3% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.0% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Watts Water Technologies.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 2026, and you can see them free on our platform here.

Even so, be aware that Watts Water Technologies is showing 1 warning sign in our investment analysis , you should know about...

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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.