Watts Water Q1 profit beats estimates on data center demand

Watts Water Technologies

06/05/2026 21:45

Overview

Global water solutions maker's Q1 net sales rose 21%, beating analyst expectations

Adjusted EPS for Q1 rose 28%, beating analyst expectations

Company announced 21% increase in quarterly dividend payments

Outlook

Company maintains 2026 sales growth outlook of 8% to 12% on a reported basis

Watts expects 2026 organic sales growth of 2% to 6%

Company sees 2026 operating margin between 18.8% and 19.4%, adjusted operating margin 19.1% to 19.7%

Result Drivers

PRICE AND VOLUME - Co said organic sales growth was driven by favorable price and higher volumes, particularly from data center growth

ACQUISITIONS - Incremental acquisition sales in the Americas and APMEA contributed 7% to reported growth

PRODUCTIVITY AND MARGIN - Margin gains attributed to price, productivity, and volume leverage, which offset inflation, investments, tariffs and acquisition dilution

Company press release: ID:nBw8C41jJa

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Sales
Beat
$677.30 mln
$635.14 mln (11 Analysts)
Q1 Adjusted EPS
Beat
$3.04
$2.69 (11 Analysts)
Q1 EPS
$2.97
Q1 Net Income
$99.60 mln
Q1 Adjusted Operating Margin
20.10%
Q1 Operating Margin
19.60%


Analyst Coverage

The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 2 "strong buy" or "buy", 11 "hold" and no "sell" or "strong sell"

The average consensus recommendation for the industrial machinery & equipment peer group is "buy."

Wall Street's median 12-month price target for Watts Water Technologies Inc is $337.50, about 15.7% above its May 5 closing price of $291.69

The stock recently traded at 24 times the next 12-month earnings vs. a P/E of 27 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(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.)