Watsco, Inc. (NYSE:WSO) First-Quarter Results: Here's What Analysts Are Forecasting For This Year

Shareholders of Watsco, Inc. (NYSE:WSO) will be pleased this week, given that the stock price is up 12% to US$443 following its latest quarterly results. It looks like the results were a bit of a negative overall. While revenues of US$1.6b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 4.5% to hit US$2.17 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Watsco

After the latest results, the 13 analysts covering Watsco are now predicting revenues of US$7.70b in 2024. If met, this would reflect an okay 5.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 10.0% to US$14.25. Before this earnings report, the analysts had been forecasting revenues of US$7.74b and earnings per share (EPS) of US$14.38 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$411, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Watsco at US$500 per share, while the most bearish prices it at US$285. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Watsco's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.5% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.7% per year. Even after the forecast slowdown in growth, it seems obvious that Watsco is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Watsco going out to 2026, and you can see them free on our platform here..

We also provide an overview of the Watsco Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.