- KeyBanc analyst Jeffrey Hammond upgraded Watsco Inc (NYSE:WSO) to Overweight from Sector Weight with a price target of $320, implying an upside of 23%.
- The analyst believes pessimism around the residential HVAC cycle has gotten too negative near-term, while he has gotten “increasingly comfortable” that a significant portion of Watsco’s recent gross margin improvement is sustainable long-term.
- With upward EPS revisions against a recent correction in Watsco’s share price, Hammond contends that valuation is now at the low end of its historical trading range.
- Recently, Watsco reported Q4 EPS of $2.02, an increase of 77% year-over-year, beating the consensus of $1.69, and Sales of $1.51 billion (+31% Y/Y, and +21% on a same-store basis), beating the consensus of $1.35 billion.
- The operating income increased 76% Y/Y to $123 million and the margin expanded by 210 bps to 8.1%. The gross margin expanded by 290 bps to 27.3%.
- The company recorded a 22% growth in HVAC equipment (68% of sales), +17% in other HVAC products (28% of sales), and +35% in commercial refrigeration products (4% of sales).
- Watsco’s operating cash flow was $350 million in FY21 versus $534 million last year.
- The company authorized a 13% increase in the annual dividend to $8.80 per share effective next scheduled quarterly payment date on April 29, 2022.
- Price Action: WSO shares are trading lower by 1.18% at $259.90 on the last check Monday.
Dooap Integrates Vertex Tax Compliance Solution With Its Accounts Payable Automation
Dooap Integrates Vertex Tax Compliance Solution with its Accounts Payable Automation
Integration Enables Complete, Easy Indirect Tax Compliance and Enhanced Customer Experience
Dooap, a leading Accounts Payable (AP)
