Watsco

WSO · NYSE

$301.85+$7.85 (+2.67%)TodayMarket closed · Oct 20, 7:30 PM ET

Prev close $294.00

WSO analyst rating

HoldConsensus of 7 analysts over the last 12 months. 29% rate it a buy.

Strong buy0
Buy2
Hold5
Underperform0
Sell0

12-month price target · 13 analysts

Average $387.16 (+28.3% upside)

Low: $333.30
Now: $301.85
High: $509.25

Upgrades and downgrades

The latest rating actions, newest first

WSO analyst upgrades, downgrades and rating actions
Firm	Date	Action	Rating	Price target	Hit rate
Mizuho	Oct 15, 2026	Maintains	Neutral	$350.00 → $325.00	46%
Morgan Stanley	Oct 12, 2026	Maintains	Equal-Weight	$370.00 → $330.00	68%
Stephens & Co.	Aug 17, 2026	Maintains	Overweight	$485.00	72%
DA Davidson	Jul 30, 2026	Maintains	Neutral	$385.00 → $330.00	65%
Baird	Jul 28, 2026	Maintains	Outperform	$460.00 → $420.00	64%
Morgan Stanley	Jul 10, 2026	Maintains	Equal-Weight	$370.00 → $405.00	68%
DA Davidson	Jun 16, 2026	Initiates	Neutral	$385.00	65%
Stephens & Co.	Apr 29, 2026	Maintains	Overweight	$475.00 → $485.00	72%
JP Morgan	Feb 19, 2026	Maintains	Neutral	$370.00 → $400.00	60%
JP Morgan	Jan 16, 2026	Maintains	Neutral	$360.00 → $370.00	60%

The case for and against

Updated Oct 15, 2026

Bull case

Watsco is supported by its dominant scale in a fragmented North America HVAC/R market, with roughly 10%-13% share, more than 120,000 contractor customers, and about 65%-70% of sales tied to resilient residential replacement demand. Its “buy and build” strategy, dating to 1989, has completed roughly 73 acquisitions, expanded the footprint to about 720 locations, and added recurring growth through strong regional distributors like Homans and Jackson Supply. The outlook is further strengthened by pricing and mix tailwinds from 2023 SEER changes and the 2025 A2L refrigerant transition, plus technology and procurement initiatives that lifted gross margin by about 200bp to 28% and support a target near 30%.

Bear case

Watsco is vulnerable to a weak housing and replacement cycle because HVAC demand is tied to new construction, weather, and consumer willingness to spend, while elevated interest rates can further slow contractor activity and replacement decisions. Its 75%-80% residential revenue mix and heavy Sunbelt exposure make earnings especially sensitive to soft unit demand, and the company’s reliance on a large dealer network does not eliminate cyclicality or margin pressure. Recent results reinforce the cautious view, with 1Q26 sales flat at $1.533 billion, gross margin down 20 bps to 27.9%, operating income down 2% to $110 million, and EPS down to $1.87 from $1.93 in 1Q25.

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