Stock Track | Watsco Plummets 6.94% in Pre-market Trading After Q2 Earnings and Revenue Miss Estimates

Stock Track07-29

Watsco (WSO) shares tumbled 6.94% in pre-market trading on Wednesday after the company reported second-quarter financial results that fell short of analyst expectations. The HVAC distributor posted earnings of $4.00 per share, missing the consensus estimate of $4.47 to $4.51, and quarterly sales of $2.105 billion, which came in below the projected $2.147 billion.

The earnings miss was driven by a 12% decline in adjusted EPS compared to the same period last year, along with gross margin normalization as OEM pricing actions returned to more conventional levels following outsized benefits from inflation and tariffs in 2025. While revenue rose 2% year-over-year, the company noted stabilizing end-market demand after the completion of the A2L refrigerant transition, which had previously disrupted domestic HVAC equipment sales.

Looking ahead, Watsco expects more conventional supply-chain trends for the remainder of 2026. The company also completed its acquisition of Jackson Supply, expanding its presence in key Sunbelt markets. Despite the miss, the stock retains a “hold” average analyst rating, with a median 12-month price target of $420, representing a potential upside from its latest close.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment