Watsco Q2 revenue up 2%; expects conventional supply-chain trends for 2026

Watsco

29/07/2026 12:40

Overview
US HVAC distributor's Q2 revenue rose 2% but missed analyst expectations
Q2 adjusted EPS fell 12% to $4.00
Company completed acquisition of Jackson Supply, expanding Sunbelt market presence

Outlook
Company expects more conventional supply-chain trends for remainder of 2026
Watsco says stabilizing end-market demand following regulatory transitions

Result Drivers
A2L TRANSITION COMPLETION - Co said end-market demand stabilized after last year's transition to A2L refrigerants, which had affected domestic HVAC equipment sales
GROSS MARGIN NORMALIZATION - Gross margin declined due to normalized OEM pricing actions in 2026 compared to outsized benefits from inflation and tariffs in 2025
JACKSON SUPPLY ACQUISITION - Acquisition of Jackson Supply expanded presence in key Sunbelt markets and diversified product offering

Company press release: ID:nGNX68p2Zf

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Sales
Miss
$2.1 bln
$2.15 bln (11 Analysts)
Q2 EPS
 
$4
 

Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 12 "hold" and 2 "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 $420.00, about 14.3% above its July 28 closing price of $367.51
The stock recently traded at 27 times the next 12-month earnings vs. a P/E of 28 three months ago

Reuters Recommended Reads
July 29 - Lennox Q2 revenue slightly misses estimates on residential weakness; cuts EPS guidance
July 28 - Carrier Q2 revenue rises on Climate Solutions Americas segment growth
July 27 - France's Rexel H1 sales rise, EBITA margin improves on volume and price gains

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)