Watts Water (WTS) Surges 28.2% YTD: Will the Uptrend Continue?
Watts Water Technologies WTS is witnessing strong momentum this year so far. The shares of the company have gained 28.2% year to date compared with the sub-industry’s growth of 21.7%.
The company designs, manufactures and sells various water safety and flow control products for the water quality, water conservation, water safety and water flow control markets.
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Catalysts Behind the Price Surge
Let’s delve deeper to unearth the factors working in favor of this Zacks Rank #2 (Buy) stock.
The increase in share price is driven by the company’s robust financial performance. The company came up with an impressive performance in second-quarter fiscal 2023.
The company reported second-quarter fiscal 2023 adjusted earnings per share (EPS) of $2.34, which increased 11% on a year-over-year basis and beat the Zacks Consensus Estimate by 14.2%. The company’s quarterly net sales rose 1% year over year to $532.8 million. The top line surpassed the Zacks Consensus Estimate by 0.5%. Organic sales were flat year over year.
The company’s performance is benefiting from strengthening momentum in the Asia-Pacific region as well as healthy growth in Europe. In the last reported quarter, sales from Asia-Pacific, the Middle East and Africa reported a 33% improvement in sales to $30 million.
The company is likely to benefit from continued investment in smart and connected-enabled products, which are expected to provide further differentiation in the marketplace. Watts Water is focused on enhancing organic growth, driving margin expansion and reinvesting in productivity initiatives.
Also, the company has an impressive VGM Score of B. This style score condenses all the essential metrics from a company’s financial statements to get a true sense of the quality and sustainability of its growth.
The Zacks Consensus Estimate for fiscal 2023 and 2024 revenues has increased 6.1% and 6.6%, respectively, in the past 60 days, reflecting analysts’ optimism regarding the company’s prospects.
However, the company’s performance in Europe in the second half of the year is likely to be affected due to weakness in the residential market coupled with decreasing Eurozone PMI and the potential impact of changes to the energy incentive program in Italy.
Other Stocks to Consider
Some other top-ranked stocks in the broader technology space are Woodward WWD, Aspen Technology AZPN and Badger Meter BMI. Woodward and Badger Meter presently sport a Zacks Rank #1 (Strong Buy), whereas Aspen Technology currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Woodward’s fiscal 2023 EPS has increased 12.6% in the past 60 days to $4.03.
WWD’s long-term earnings growth rate is 13.5%. Shares of WWD have gained 27.2% in the past year.
The Zacks Consensus Estimate for Aspen Technology’s fiscal 2024 EPS has increased 5.8% in the past 60 days to $6.58.
Aspen Technology’s long-term earnings growth rate is 17.1%. Shares of AZPN have declined 10% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has increased 6.3% in the past 60 days to $2.86.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 6.7%. Shares of BMI have surged 63.7% in the past year.
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Badger Meter, Inc. (BMI) : Free Stock Analysis Report
Watts Water Technologies, Inc. (WTS) : Free Stock Analysis Report
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Aspen Technology, Inc. (AZPN) : Free Stock Analysis Report
