Last Updated: 19 Sep 2024
Executive Summary
Watsco Inc. (WSO) is a leading distributor of air conditioning, heating, and refrigeration equipment and supplies in North America. The company has a strong financial position with a market capitalization of $19.8 billion, EBITDA of $768.4 million, and a dividend yield of 0.022%. Watsco's stock price is currently trading at $486.54, near its 52-week high of $520.41. The company's fundamentals are strong, with a trailing PE ratio of 37.45, a forward PE ratio of 32.89, and a price-to-sales ratio of 2.663. Technical analysis suggests that the stock is in a bullish trend and is likely to continue to rise in the short term. Analysts have a strong buy rating on the stock, with a target price of $472.55.
Company Overview
Watsco Inc. was founded in 1954 and is headquartered in Miami, Florida. The company distributes a wide range of HVACR equipment and supplies to contractors, wholesalers, and end-users in the United States, Canada, Mexico, and Puerto Rico. Watsco has a network of over 600 locations and serves over 100,000 customers. The company's products include air conditioners, furnaces, heat pumps, refrigeration equipment, and related parts and supplies.
Fundamental Analysis
Watsco Inc. has a strong financial position. The company's revenue has grown steadily in recent years, from $5.7 billion in 2019 to $7.4 billion in 2023. The company's net income has also grown steadily, from $436.5 million in 2019 to $601.6 million in 2023. Watsco's profitability metrics are also strong. The company's gross profit margin has averaged 27% over the past five years, and its operating profit margin has averaged 12%. Watsco's return on assets and return on equity are also strong, averaging 10.7% and 22.5%, respectively, over the past five years.
Technical Analysis
Watsco Inc.'s stock price has been in a bullish trend since the beginning of 2023. The stock price has broken out of a resistance level at $450 and is now trading near its 52-week high. The stock's moving averages are also bullish, with the 50-day moving average above the 200-day moving average. The stock's relative strength index (RSI) is also bullish, indicating that the stock is not overbought.
Short Term Outlook
Watsco Inc.'s stock price is likely to continue to rise in the short term. The stock is in a bullish trend and is trading near its 52-week high. The stock's moving averages and RSI are also bullish, indicating that the stock is likely to continue to rise.
Long Term Outlook
Watsco Inc.'s long-term outlook is also positive. The company has a strong financial position and is well-positioned to benefit from the growing demand for HVACR equipment and supplies. The company's focus on customer service and its commitment to innovation are also likely to drive long-term growth.
Analyst Recommendations
Analysts have a strong buy rating on Watsco Inc.'s stock. The average target price for the stock is $472.55, which represents a potential upside of 10% from the current price. Three analysts have a strong buy rating on the stock, while nine analysts have a hold rating.
