Oppenheimer analyst Bryan Blair has maintained their neutral stance on WTS stock, giving a Hold rating on October 19.
Bryan Blair has given his Hold rating due to a combination of factors. In the third quarter, Watts Water Technologies reported adjusted earnings per share of $2.04, considerably outperforming consensus expectations. The company’s margins, particularly in the Americas, performed exceedingly well, even though European performance was below expectations. The company’s revenue was in line with forecasts, with total sales growing by 3% year on year.
Despite inflation and lower productivity, pricing, mix, and productivity benefits have more than compensated to expand the operating margin. Furthermore, the company has adjusted its 2023 organic sales guidance to flat year on year, and has improved its operating margin prediction to a range of 17.6-17.7%. Watts Water Technologies has also spent $11.7M Year To Date (YTD) on share repurchases and has a further $166M available for this purpose. Lastly, the company recently completed the acquisition of Bradley, with integration progressing smoothly. In Blair’s view, Watts’ current valuation accurately reflects its growth and earnings prospects, indicating that significant capital deployment could be the next key catalyst for the company.
In another report released on October 19, Stifel Nicolaus also maintained a Hold rating on the stock with a $190.00 price target.
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Watts Water Technologies (WTS) Company Description:
Watts Water Technologies, Inc. engages in the manufacture and provision of products for water conservation, safety, and flow control. It operates through the following geographic segments: Americas, Europe, and Asia-Pacific, Middle East and Africa. Its services include plumbing and flow control solutions, water quality and conditioning, water reuse and drainage, heating, ventilation, and air conditioning, and municipal waterworks. The company was founded in 1985 and is headquartered in North Andover, MA.
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