Strength Seen in Watsco (WSO): Can Its 6.2% Jump Turn into More Strength?
Watsco (WSO) shares ended the last trading session 6.2% higher at $377.74. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 1.6% loss over the past four weeks.
The company’s focus on technological advancements, reflecting growth in e-commerce business and B2B initiative, has most likely induced bullish sentiments among investors. Furthermore, WSO’s implementation of accretive acquisition strategies, to solidify its product portfolio and leverage new business opportunities, adds to the growth trend.
This heating and cooling company is expected to post quarterly earnings of $4.23 per share in its upcoming report, which represents a year-over-year change of +5%. Revenues are expected to be $2.05 billion, up 0.7% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Watsco, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on WSO going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Watsco belongs to the Zacks Building Products - Air Conditioner and Heating industry. Another stock from the same industry, Lennox International (LII), closed the last trading session 2.5% higher at $374.40. Over the past month, LII has returned -1.7%.
For Lennox , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $4.56. This represents a change of +11.2% from what the company reported a year ago. Lennox currently has a Zacks Rank of #2 (Buy).
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Watsco, Inc. (WSO) : Free Stock Analysis Report
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