UBS Maintains a 'Neutral' on Watsco (WSO); Cutting Estimates & PT on Weaker Consumer, Housing Outlook
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Price: $311.86 -0.38%
Rating Summary:
6 Buy, 18 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
Rating Summary:
6 Buy, 18 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
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UBS maintains a 'Neutral' on Watsco (NYSE: WSO), PT lowered from $70 to $65.
UBS analyst says, "Cutting our 2011/12 EPS estimates to $3.10/$3.80 from $3.15/$4.10 - Our revisions reflect what we think was a weak start to 2Q11 (our 2Q EPS falls to $1.27 from $1.36) plus a weaker consumer/ housing outlook. We see flat starts in 2011, modest growth in 2012, and a more uncertain pace of consumer recovery than we had factored. Our cuts are being made concurrently with our UBS June HVAC survey published today, which shows rising repair rates and diminished confidence in current HVAC market conditions and the NTM outlook."
"Thesis: Neutral rating largely reflects valuation - Legacy WSO share/ operating gains plus Carrier improvements are driving strong EPS/FCF growth despite weak resi demand, but this seems reflected in premium multiples. We also see near-term downside risk on estimate adjustments into 2Q."
For more ratings news on Watsco click here and for the rating history of Watsco click here.
Shares of Watsco closed at $63.66 yesterday.
UBS analyst says, "Cutting our 2011/12 EPS estimates to $3.10/$3.80 from $3.15/$4.10 - Our revisions reflect what we think was a weak start to 2Q11 (our 2Q EPS falls to $1.27 from $1.36) plus a weaker consumer/ housing outlook. We see flat starts in 2011, modest growth in 2012, and a more uncertain pace of consumer recovery than we had factored. Our cuts are being made concurrently with our UBS June HVAC survey published today, which shows rising repair rates and diminished confidence in current HVAC market conditions and the NTM outlook."
"Thesis: Neutral rating largely reflects valuation - Legacy WSO share/ operating gains plus Carrier improvements are driving strong EPS/FCF growth despite weak resi demand, but this seems reflected in premium multiples. We also see near-term downside risk on estimate adjustments into 2Q."
For more ratings news on Watsco click here and for the rating history of Watsco click here.
Shares of Watsco closed at $63.66 yesterday.
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