Watsco shares slide as Q1 results show slight margin and EPS pressure despite flat revenue

Watsco, Inc. (WSO) is down 6.7% today. Here is some analysis on what might have caused this price movement.

Analysis: The move appears tied to Watsco’s first-quarter update, where revenue was essentially flat but profitability metrics softened modestly versus last year. Even small changes in gross margin, operating income, and EPS can drive an outsized reaction when expectations are set for a seasonal demand ramp into spring and summer.

Details:

First-quarter revenue was about flat at $1.53 billion, while gross margin edged down to 27.9% from 28.1% a year earlier.

Operating income declined 2% to about $110 million and diluted EPS fell to $1.87 from $1.93 in the prior-year quarter.

Sales performance was mixed: U.S. markets increased 2%, while international sales fell 11%; HVAC equipment sales (the largest category) decreased 1% as higher prices were offset by lower unit volumes.

The company also announced an agreement to acquire Jackson Supply Company (about $230 million in annual sales), expected to close in Q2 2026, which may not have outweighed near-term earnings concerns.

Sources:

SEC, Watsco Investor Relations, The Associated Press

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 333 institutional investors add shares of $WSO stock to their portfolio, and 406 decrease their positions in their most recent quarter.

Here are some of the largest recent moves:

CAPITAL INTERNATIONAL INVESTORS added 2,356,998 shares (+103.1%) to their portfolio in Q4 2025, for an estimated $794,190,476
FMR LLC removed 1,034,964 shares (-34.5%) from their portfolio in Q4 2025, for an estimated $348,731,119
M&T BANK CORP added 598,677 shares (+60779.4%) to their portfolio in Q4 2025, for an estimated $201,724,215
UBS AM, A DISTINCT BUSINESS UNIT OF UBS ASSET MANAGEMENT AMERICAS LLC removed 387,598 shares (-75.1%) from their portfolio in Q4 2025, for an estimated $130,601,146
CORIENT PRIVATE WEALTH LLC added 316,129 shares (+202.6%) to their portfolio in Q4 2025, for an estimated $106,519,666
TWO SIGMA INVESTMENTS, LP added 231,725 shares (+133.9%) to their portfolio in Q4 2025, for an estimated $78,079,738
MORGAN STANLEY added 211,924 shares (+34.6%) to their portfolio in Q4 2025, for an estimated $71,407,791

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.

$WSO Price Targets

Multiple analysts have issued price targets for $WSO recently. We have seen 4 analysts offer price targets for $WSO in the last 6 months, with a median target of $370.0.

Here are some recent targets:

Stephen Tusa from JP Morgan set a target price of $400.0 on 02/19/2026
Christopher Snyder from Morgan Stanley set a target price of $370.0 on 01/14/2026
Dan Dolev from Mizuho set a target price of $370.0 on 01/05/2026
Damian Karas from UBS set a target price of $370.0 on 01/05/2026

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.