Watts Water Q2 sales beat estimates on higher volumes, favorable price realization

Watts Water Technologies

05/08/2026 21:47

Overview
Plumbing and water solutions maker's Q2 sales rose 19%, beating analyst expectations
Adjusted diluted EPS for Q2 increased 18%, beating analyst expectations
Company raised full-year 2026 sales and margin outlook on strong demand and price realization

Outlook
Watts Water raises 2026 sales growth outlook to 14%-17% reported, 8%-11% organic
Company expects 2026 operating margin of 19.4%-20.0%, adjusted margin of 19.8%-20.4%
Watts Water anticipates sequential increases in free cash flow in H2 2026

Result Drivers
PRICE REALIZATION & VOLUME - Co said Q2 organic sales growth was driven by favorable price realization and higher volume, especially from data center growth
ACQUISITIONS & FX - Acquisitions and favorable foreign exchange contributed to reported sales growth
MARGIN PRESSURE - Operating margin declined due to acquisition dilution, inflation, tariffs, and a difficult comparison with a one-time tariff-related benefit in the prior year

Company press release: ID:nBwbmNtKxa

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Sales
Beat
$763.20 mln
$725.75 mln (10 Analysts)
Q2 Adjusted EPS
Beat
$3.66
$3.33 (10 Analysts)
Q2 EPS
 
$3.53
 
Q2 Net Income
 
$118.30 mln
 
Q2 Adjusted Operating Margin
 
21.00%
 
Q2 Operating Margin
 
20.20%
 

Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 10 "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 $330.00, about 7.8% below its August 4 closing price of $358.09
The stock recently traded at 28 times the next 12-month earnings vs. a P/E of 25 three months ago

Reuters Recommended Reads
Aug 4 - DuPont narrows annual sales forecast on water business weakness, shares down
Aug 4 - Fortune Brands Q2 adjusted EPS beats estimates
Aug 4 - Mayville Engineering Q2 revenue beats estimates on Datacenter & Critical Power growth

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.)