William Blair analyst Ryan Merkel has maintained their bullish stance on WSO stock, giving a Buy rating today.
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Ryan Merkel has given his Buy rating due to a combination of factors that indicate potential for future growth despite recent challenges. The company’s gross margins have reached a record high, showing a significant year-over-year expansion, which suggests strong pricing power and effective cost management. This improvement in margins is expected to be driven by tariff price increases and strategic pricing initiatives.
Despite a decline in sales volumes attributed to weather conditions, new residential market softness, and the A2L transition, these headwinds are anticipated to lessen in the latter half of the year. Additionally, Watsco’s focus on growing non-equipment sales and its ability to manage costs effectively, even with increased SG&A expenses, supports the potential for recovery and growth. These factors collectively contribute to the Buy rating, reflecting confidence in the company’s strategic direction and financial resilience.
In another report released today, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $522.00 price target.
Based on the recent corporate insider activity of 12 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of WSO in relation to earlier this year.