Watsco Falls as Investors Weigh Recent Earnings Miss and Margin Pressure

Watsco (WSO) is down 4.3% today. Here is some analysis on what might have caused this price movement.

Analysis: The most likely driver is lingering pressure from Watsco’s late-July quarterly report, which showed weaker profitability even as sales edged higher. If there was no fresh company-specific announcement today, the drop could also reflect continued caution around residential HVAC demand and the stock’s reset after lower analyst price targets followed the earnings release.

Details:

Watsco’s second-quarter revenue rose 2% to about $2.1 billion, but earnings per share fell 12% to $4.00, a combination that can signal weaker operating leverage.

Gross margin narrowed to 27.5% from 29.3% a year earlier, and the company said last year benefited from A2L transition-related margin support that did not repeat in 2026.

Operating income declined 12% and operating margin slipped to 11.3%, reinforcing the view that profit pressure, not top-line growth, has been the key concern for investors.

Watsco also noted only 1% same-store revenue growth in the quarter, which may have kept attention on soft underlying demand despite its strong balance sheet, digital growth, and the Jackson Supply acquisition.

Sources:

Watsco, SEC, Benzinga

Disclaimer: This price movement analysis was generated with the help of AI. Please double-check the information provided for mistakes.

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$WSO Hedge Fund Activity

We have seen 335 institutional investors add shares of $WSO stock to their portfolio, and 441 decrease their positions in their most recent quarter.

Here are some of the largest recent moves:

SIXTH STREET PARTNERS MANAGEMENT COMPANY, L.P. added 1,459,768 shares (+inf%) to their portfolio in Q2 2026, for an estimated $608,329,118
CORIENT PRIVATE WEALTH LLC removed 328,966 shares (-69.7%) from their portfolio in Q1 2026, for an estimated $119,674,541
GOLDMAN SACHS GROUP INC removed 226,801 shares (-40.5%) from their portfolio in Q2 2026, for an estimated $94,514,780
BAILLIE GIFFORD & CO added 212,044 shares (+23.1%) to their portfolio in Q2 2026, for an estimated $88,365,096
JPMORGAN CHASE & CO added 207,064 shares (+inf%) to their portfolio in Q2 2026, for an estimated $86,289,780
TWO SIGMA INVESTMENTS, LP removed 204,414 shares (-68.1%) from their portfolio in Q2 2026, for an estimated $85,185,446
KAYNE ANDERSON RUDNICK INVESTMENT MANAGEMENT LLC removed 194,844 shares (-14.7%) from their portfolio in Q2 2026, for an estimated $81,197,340

To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard. You can access data on hedge funds moves and 13F filings through the Quiver Quantitative API 13F endpoint.

$WSO Price Targets

Multiple analysts have issued price targets for $WSO recently. We have seen 2 analysts offer price targets for $WSO in the last 6 months, with a median target of $435.0.

Here are some recent targets:

Chris Dankert from DA Davidson set a target price of $385.0 on 06/16/2026
Tommy Moll from Stephens & Co. set a target price of $485.0 on 04/29/2026

This article is not financial advice. See Quiver Quantitative's disclaimers for more information. Note that there may be inaccuracies due to mistakes in ticker-mapping, and other anomalies.