Watsco Q2 revenue misses estimates on new product launch, but gross profit hits record

Overview

• Watsco Q2 revenue falls 4% to $2.06 bln, missing analyst expectations

• Gross profit rises 4% to record $603 mln, driven by margin expansion

• Co navigates A2L refrigerant transition, impacting sales volumes

Result Drivers

• A2L TRANSITION - Transition to A2L refrigerants impacted sales volumes, contributing to revenue decline

• PRICING TECHNOLOGIES - Margin expansion driven by pricing technologies and OEM pricing actions

• EXPENSE INCREASES - Higher SG&A expenses due to labor and transportation costs related to A2L transition and acquisitions

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 13 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the electrical components & equipment peer group is "buy."

• Wall Street's median 12-month price target for Watsco Inc is $480.00, about 3.2% above its July 29 closing price of $464.82

• The stock recently traded at 31 times the next 12-month earnings vs. a P/E of 34 three months ago

Press Release: ID:nGNX4rTPP5