Want to see WTS full AI Analyst Report?
Top Page
Watts Water Technologies
(NYSE:WTS)
Select Model
Select Model
Rating:82Outperform
Price Target:
$422.00
▲(22.07% Upside)
Action:Reiterated
Date:08/06/26
The score is driven primarily by strong financial performance (high margins, steady growth, very low leverage, and solid free cash flow) and a constructive earnings outlook (raised guidance and accelerating data-center demand). Technicals also support the view with an established uptrend, though near-term momentum looks somewhat stretched. The main offset is valuation, with a high P/E and low dividend yield, plus execution risks from acquisition dilution and macro/tariff uncertainty.
Positive Factors
Balance-sheet strength
Watts' extremely low leverage and expanding equity provide durable financial flexibility for acquisitions, R&D, and cyclical downturns. A conservative balance sheet reduces refinancing risk, supports disciplined capital allocation, and underpins the company's ability to fund strategic investments without pressuring cash flow over the next several quarters.
Negative Factors
Soft end markets & product rationalization headwind
Persistent weakness in residential/new construction reduces a traditional, steady demand base, and deliberate SKU rationalization creates near-term organic drag. Together these factors can constrain top-line resilience and require stronger offsetting growth from other segments or acquisitions to sustain company-wide revenue momentum across multiple quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance-sheet strength
Watts' extremely low leverage and expanding equity provide durable financial flexibility for acquisitions, R&D, and cyclical downturns. A conservative balance sheet reduces refinancing risk, supports disciplined capital allocation, and underpins the company's ability to fund strategic investments without pressuring cash flow over the next several quarters.
Read all positive factors
Watts Water Technologies Key Performance Indicators (KPIs)
Any
Revenue by Product Category
Shows how sales split across product lines (for example valves, pumps, water treatment and fire protection), revealing which products drive growth and margins and where changes in customer demand or product mix could materially affect revenue and profitability.
Shows how sales split across product lines (for example valves, pumps, water treatment and fire protection), revealing which products drive growth and margins and where changes in customer demand or product mix could materially affect revenue and profitability.
Data provided by:
The Fly
The FlyWatts Water Technologies (WTS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.45B
Dividend Yield0.59%
Average Volume (3M)436.67K
Price to Earnings (P/E)32.5
Beta (1Y)0.84
Revenue Growth17.13%
EPS Growth23.21%
CountryUS
Employees5,700
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)11.46
Shares Outstanding27,466,760
10 Day Avg. Volume174,586
30 Day Avg. Volume436,665
Financial Highlights & Ratios
PEG Ratio1.59
Price to Book (P/B)4.56
Price to Sales (P/S)3.79
P/FCF Ratio25.95
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$398.29Price Target Upside15.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)12.83
Revenue Forecast (FY)$2.83B
Watts Water Technologies Business Overview & Revenue Model
Company Description
Watts Water Technologies, Inc. is a global enterprise that creates, produces, and distributes a comprehensive range of products and systems designed to regulate and optimize the movement and conservation of liquids and energy within and around bot...
How the Company Makes Money
Watts primarily makes money by selling engineered water-management and water-quality products and solutions for building and infrastructure applications. Its revenue model is predominantly product sales (rather than recurring subscription-based re...
Watts Water Technologies Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call conveyed a broadly positive picture: management reported record top-line and EPS, strong organic growth, a sizable acceleration in data center sales (expanding TAM and new product traction), and raised full-year sales and margin guidance. These positives are tempered by margin compression from acquisition dilution and a difficult prior-year comparison, modest year-to-date free cash flow decline, continued softness in residential/new construction, and ongoing geopolitical/tariff and inflation risks. Management emphasized a strong balance sheet, disciplined capital allocation, and confidence in achieving free cash flow conversion targets.Positive Updates
Record Quarter — Sales, Operating Income and EPS
Second quarter sales of $763M (reported +19% YoY, organic +12% YoY) with record operating income and record adjusted EPS of $3.66 (+18% YoY).
Negative Updates
Margin Compression vs. Prior Year
Adjusted operating margin declined 60 basis points year-over-year to 21.0%; adjusted EBITDA margin declined 70 basis points to 23.1%, driven by acquisition dilution (~50–70 bps), inflation and a difficult prior-year tariff-related price/cost benefit comparison.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarter — Sales, Operating Income and EPS
Second quarter sales of $763M (reported +19% YoY, organic +12% YoY) with record operating income and record adjusted EPS of $3.66 (+18% YoY).
Read all positive updates
Company Guidance
Watts raised its full‑year outlook, now forecasting organic sales growth of 8%–11% (about +1 point excluding the 80/20 product rationalization) and reported sales up 14%–17%; regionally it expects Americas organic growth of 9%–12% (80/20 headwind $25–26M), Europe roughly +1%–4%, and APMEA +9%–12%. Incremental acquired sales are expected at $105–110M in the Americas and $21–22M in APMEA, with an ~$18M favorable FX impact; data centers are now expected to be mid‑ to high‑single digits of company sales for the year (8% YTD). Watts raised its full‑year adjusted EBITDA and operating margin expansion to +20 to +80 basis points (despite ~50 bps of acquisition dilution), with segment margin ranges of Americas (‑20 to +40 bps), Europe (+20 to +80 bps) and APMEA (+30 to +90 bps). Third quarter guidance is reported sales +11%–14%, organic +5%–8%, EBITDA margin 22.2%–22.8% and operating margin 19.8%–20.4%, with Q3 acquired sales ~$30–33M (Americas) and ~$5–6M (APMEA), a ~$3M FX headwind and ~50 bps of acquisition dilution. The company reaffirmed free cash flow conversion ≥90% of net income (YTD FCF $98M vs. $105M prior year) and a strong balance sheet (net debt to capitalization −12%, net leverage −0.4x); guidance assumes no change in the Middle East conflict or current tariff structure and excludes potential IEPA refunds.Watts Water Technologies Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
92
Very Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.68B | 2.44B | 2.25B | 2.06B | 1.98B | 1.81B |
| Gross Profit | 1.31B | 1.21B | 1.06B | 960.90M | 874.30M | 767.10M |
| EBITDA | 606.90M | 513.40M | 455.10M | 401.00M | 354.30M | 285.50M |
| Net Income | 383.80M | 340.80M | 291.20M | 262.10M | 251.50M | 165.70M |
Balance Sheet | ||||||
| Total Assets | 2.95B | 2.88B | 2.40B | 2.31B | 1.93B | 1.86B |
| Cash, Cash Equivalents and Short-Term Investments | 347.90M | 405.50M | 386.90M | 350.10M | 310.80M | 242.00M |
| Total Debt | 108.00M | 197.70M | 197.00M | 298.30M | 147.60M | 141.90M |
| Total Liabilities | 762.10M | 853.50M | 689.10M | 796.10M | 630.30M | 682.40M |
| Stockholders Equity | 2.19B | 2.03B | 1.71B | 1.51B | 1.30B | 1.17B |
Cash Flow | ||||||
| Free Cash Flow | 349.40M | 356.30M | 325.80M | 281.10M | 195.90M | 154.10M |
| Operating Cash Flow | 397.90M | 402.00M | 361.10M | 310.80M | 224.00M | 180.80M |
| Investing Cash Flow | -221.60M | -302.80M | -124.70M | -343.10M | -22.90M | -30.70M |
| Financing Cash Flow | -195.80M | -96.90M | -190.50M | 69.00M | -121.70M | -118.60M |
Watts Water Technologies Technical Analysis
Positive
345.70
Price Trends
359.49
Positive
331.10
Positive
311.75
Positive
Market Momentum
6.20
Positive
53.47
Neutral
35.53
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WTS, the sentiment is Positive. The current price of 345.7 is below the 20-day moving average (MA) of 370.80, below the 50-day MA of 359.49, and above the 200-day MA of 311.75, indicating a bullish trend. The MACD of 6.20 indicates Positive momentum. The RSI at 53.47 is Neutral, neither overbought nor oversold. The STOCH value of 35.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WTS.
Watts Water Technologies Risk Analysis
Watts Water Technologies disclosed 48 risk factors in its most recent earnings report. Watts Water Technologies reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Watts Water Technologies Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $12.45B | 32.53 | 18.56% | 0.63% | 17.13% | 23.21% | |
77 Outperform | $3.93B | 17.59 | 21.21% | 1.10% | 5.88% | 49.15% | |
72 Outperform | $10.23B | 27.94 | 16.63% | 1.19% | -0.26% | 29.38% | |
69 Neutral | $8.52B | 17.47 | 26.96% | 2.34% | 0.39% | -0.01% | |
69 Neutral | $10.06B | 35.68 | 12.37% | ― | 20.63% | 27.00% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $12.01B | 46.16 | 9.54% | ― | 0.61% | -27.77% |
* Industrials Sector Average
WTS
Watts Water Technologies
371.54
89.26
31.62%
FLS
Flowserve
80.56
26.40
48.74%
GNRC
Generac Holdings
201.78
14.79
7.91%
MWA
Mueller Water Products
24.94
-2.03
-7.54%
AOS
A. O. Smith Corporation
62.15
-8.69
-12.27%
SPXC
SPX
200.98
8.51
4.42%
Watts Water Technologies Corporate Events
Executive/Board ChangesShareholder Meetings
Watts Water Shareholders Back Board, Pay, and Auditor
Positive
May 20, 2026
Watts Water Technologies, Inc. held its 2026 Annual Meeting of Stockholders on May 19, 2026, where shareholders elected nine directors, including Rebecca J. Boll, Michael J. Dubose, David A. Dunbar, Kenneth Napolitano, Joseph T. Noonan, Robert J. ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.