Watsco, Inc. research snapshot
WSO AI stock analysis currently reads Watsco as a profitable North American HVAC/R distribution leader with a broad contractor network, a debt-free balance sheet, and growing digital engagement. The caution is that 2025 revenue and earnings declined, Q1 2026 unit volume remained soft during the A2L refrigerant transition, and the stock still trades at a premium multiple. At the July 11, 2026 data cutoff, the latest verified market reference was a $380.22 close on July 8. The WSO AI stock forecast uses scenarios, not a price promise, and this page is for information only, not investment advice.
Current price
$380.22 close on July 8, 2026
Market cap
$14.65 billion using the July 8 market-data reference
AI score
68 / 100
Rating
High-quality HVAC distributor with a selective valuation setup
Trend status
Below short-term averages and near the 200-day trend reference
Data cutoff (updated weekly)
July 11, 2026
Informational use only. This page is not investment advice.
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | Watsco distributes air conditioning, heating, refrigeration equipment, parts, supplies, and related technology to contractors and technicians across North America. | High |
| Moat | Scale, local branch density, long contractor relationships, supplier access, logistics, and digital workflow tools support the moat, although distribution remains competitive and supplier-dependent. | Medium-high |
| Management | Chairman and CEO Albert H. Nahmad has led a long acquisition-led expansion, while the company continues to preserve a debt-free balance sheet and dividend capacity. | High |
| Financial trend | FY2025 revenue declined 5% to $7.239 billion and net income attributable to Watsco was about $497 million. Q1 2026 revenue was nearly flat at $1.533 billion and diluted EPS fell 3% to $1.87. | High |
| Valuation | At the July 8 price reference, exact arithmetic gives about 31.55x TTM EPS, 20.77x FCF per share, and a 3.47% annualized dividend yield. | Medium-high |
| Technical trend | The $380.22 reference was below the 50-day average near $398.16 and slightly below the 200-day average near $382.77, with RSI near 41.68. | Medium |
| Risk level | Risks include HVAC replacement volumes, A2L product transition execution, weather, inventory, supplier concentration, housing and commercial construction, acquisition integration, and multiple compression. | Medium-high |
| AI confidence | Reported-financial confidence is high, but short-term market direction and the appropriate earnings multiple remain uncertain. | High data confidence |
| Investment certainty | Medium certainty: Watsco is financially strong, but the current setup requires evidence that volume and operating leverage recover. | Medium |
WSO AI stock forecast
The WSO AI stock forecast uses the $380.22 July 8 reference, $12.05 TTM diluted EPS, and a three-year scenario model calculated with Pineify financial_rigor.py. The model is a sensitivity exercise, not a target or investment recommendation.
$465 to $500 over 3 years
More likely if HVAC unit volumes recover after the A2L transition, Sunbelt acquisitions add profitable growth, digital tools deepen contractor retention, margins hold, and investors accept an earnings multiple near 30x.
$320 to $350 over 3 years
More likely if EPS compounds near 5%, replacement demand stays ordinary, cash conversion remains healthy, and the market values WSO near 24x earnings.
$175 to $200 over 3 years
More likely if unit volumes remain weak, inventory or pricing pressure hurts margins, supplier or macro conditions deteriorate, or the multiple falls toward 17x earnings.
WSO AI technical analysis
WSO AI technical analysis is cautious at the July 11, 2026 cutoff. StockAnalysis listed a $380.22 July 8 close, a 50-day moving average of $398.16, a 200-day moving average of $382.77, and RSI of 41.68. These figures are timestamped references, not a trading signal.
| Level | Value | Why it matters |
|---|---|---|
| Current price | $380.22 close on July 8, 2026 | Latest verified price reference used in the valuation and market-cap checks. |
| Near support | $380 to $383 | The July 8 close and the 200-day moving average near $382.77 form the first trend checkpoint. |
| Deeper support | $360 to $365 | This is a risk-control zone below the 200-day reference, not a guaranteed floor. |
| Near resistance | $398 to $400 | The 50-day moving average near $398.16 is the first technical recovery level. |
| 50-day moving average | $398.16 | A sustained move back above it would improve the short-term trend reading. |
| 200-day moving average | $382.77 | A sustained break below it would weaken the longer-term trend framework. |
| Momentum | RSI 41.68 | This is below neutral but not by itself a reliable reversal signal. |
| Volume and volatility | 20-day average volume about 337,569 shares | Watch volume around earnings, A2L transition commentary, and acquisition updates. |
| Invalidation | Sustained close below $360 | A break through the 200-day area followed by a loss of $360 should reduce confidence in a trend-following setup. |
WSO AI trading strategy
The WSO AI trading strategy is a non-personalized research framework. It pairs chart confirmation with HVAC volume, margin, inventory, cash flow, acquisition, and dividend data rather than relying on one price level.
Look for WSO to reclaim the $398 to $400 area with improving volume and evidence that U.S. HVAC unit demand and operating margin are stabilizing.
Invalidate if price loses $360 on sustained weakness or if quarterly data show weaker volumes, margins, or cash conversion.
If WSO holds the $380 to $383 long-term trend area, compare the rebound with peer distributor and HVAC demand data, not price alone.
Do not assume a lower price is value if inventory, pricing, housing, or supplier conditions deteriorate.
Track U.S. and international sales, equipment volumes and pricing, A2L transition effects, gross margin, inventory turns, operating cash flow, Jackson Supply integration, digital contractor adoption, and dividend coverage.
Reduce conviction if revenue remains flat while costs, working capital, or acquisition execution weaken returns on invested capital.
Investment research summary
Watsco helps HVAC/R contractors obtain equipment, parts, supplies, logistics, credit, and workflow support. Customers pay because equipment availability, seasonal response time, product knowledge, and local service are critical to completing installations and repairs.
The moat comes from branch density, supplier relationships, contractor trust, local inventory, logistics, scale, and digital tools used by roughly 74,000 contractors, installers, and technicians. Switching costs are practical rather than contractual, and competition remains real.
The thesis can fail if housing and replacement demand weaken, the A2L transition extends unit-volume pressure, inventory turns deteriorate, supplier concentration reduces bargaining power, acquisitions fail to integrate, or the premium multiple normalizes.
Albert H. Nahmad has overseen long-term growth through organic execution and more than 70 acquisitions since Watsco entered distribution. The management test is whether the decentralized acquisition model, capital discipline, and digital investment continue to raise returns without taking balance-sheet risk.
Cooling demand, energy efficiency, higher-efficiency equipment, contractor digitization, Sunbelt population trends, and replacement needs are supportive long-term forces. Near-term results remain exposed to weather, rates, housing, construction, and product-cycle timing.
The three-scenario model produced roughly $481, $335, and $187 in bullish, base, and bearish cases before dividends. That spread shows why business quality alone is not a margin of safety: the starting multiple and earnings path matter.
Source-backed data
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| WSO price and technical references | $380.22 close on July 8, 2026; 50-day average $398.16; 200-day average $382.77; RSI 41.68 | StockAnalysis statistics | July 11, 2026 |
| Market-cap arithmetic | $14.65 billion reported versus $14.65 billion calculated from $380.22 x 38.52 million market-data shares | Pineify financial_rigor.py and StockAnalysis | July 11, 2026 |
| Statutory share count | 35,003,793 common shares plus 5,653,741 Class B common shares as of May 5, 2026 | Watsco Q1 2026 Form 10-Q | July 11, 2026 |
| FY2025 revenue and net income | $7.239 billion revenue and about $497 million net income attributable to Watsco | Watsco FY2025 Form 10-K, Macrotrends, and StockAnalysis | July 11, 2026 |
| Q1 2026 operating results | $1.533 billion revenue, 27.9% gross margin, $110 million operating income, and $1.87 diluted EPS | Watsco Q1 2026 results | July 11, 2026 |
| Q1 product mix and demand | U.S. sales up 2%; HVAC equipment was 65% of sales and down 1%; other HVAC products were 30% and up 4%; commercial refrigeration was 5% and up 11% | Watsco Q1 2026 results | July 11, 2026 |
| Liquidity and debt | $392.7 million cash plus $200 million short-term investments at March 31, 2026; company described its balance sheet as debt-free | Watsco Q1 2026 results and Form 10-Q | July 11, 2026 |
| Valuation arithmetic | 31.55x TTM EPS, 4.35x book value, 20.77x FCF per share, and 3.47% annualized dividend yield | Pineify financial_rigor.py using StockAnalysis inputs | July 11, 2026 |
| Digital adoption and acquisition | About 74,000 contractors, installers, and technicians engage digitally; Jackson Supply acquisition added a distributor with about $230 million annual sales | Watsco Q1 2026 results | July 11, 2026 |
This WSO AI stock analysis is an informational research tool only and is not investment advice, financial advice, or a recommendation to buy or sell any security. Forecast scenarios use available public data as of July 11, 2026, are not guaranteed, and can be wrong if HVAC demand, valuation, company execution, policy, or market conditions change.
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