Watts Water Technologies, Inc. (NYSE:WTS) Just Reported And Analysts Have Been Lifting Their Price Targets

Investors in Watts Water Technologies, Inc. (NYSE:WTS) had a good week, as its shares rose 7.4% to close at US$221 following the release of its full-year results. Watts Water Technologies reported US$2.3b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$8.69 beat expectations, being 2.0% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Watts Water Technologies

Following last week's earnings report, Watts Water Technologies' nine analysts are forecasting 2025 revenues to be US$2.26b, approximately in line with the last 12 months. Per-share earnings are expected to accumulate 5.0% to US$9.17. Before this earnings report, the analysts had been forecasting revenues of US$2.28b and earnings per share (EPS) of US$8.83 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.3% to US$218. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Watts Water Technologies at US$238 per share, while the most bearish prices it at US$175. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 0.5% annualised growth rate until the end of 2025 being well below the historical 8.6% 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 4.2% annually. Factoring in the forecast slowdown in growth, it seems obvious that Watts Water Technologies is also expected to grow slower than other industry participants.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Watts Water Technologies. Long-term earnings power is much more important than next year's profits. We have forecasts for Watts Water Technologies going out to 2027, and you can see them free on our platform here.

You can also see our analysis of Watts Water Technologies' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.