Equity Profile
Pre-Earnings Brief
Watsco, Inc. (WSO) is a leading distributor of air conditioning, heating, and refrigeration equipment in North America....
EPS
Earnings per share (EPS) is a key indicator of the company's profitability and financial health.
Revenue
Revenue growth will indicate how well Watsco is performing in a competitive market.
1 more metrics, Wall Street expectations, options signals, track record, and call prep available with Pro.
EPS Beat Streak
1Q
EPS Beat Rate
25%
Avg EPS Surprise
-5.04%
Avg Stock Reaction
-1.83%
In Q1-2026, Watsco reported an EPS of $1.87, beating expectations by nearly 8%. However, the stock declined by over 4% the following day, reflecting market caution despite the positive earnings surprise.
Management Promises & Guidance
Investors are cautiously optimistic ahead of Watsco's Q2 earnings report, especially after the recent EPS beat. However, the lack of revenue guidance and mixed historical performance creates uncertainty.
Bull Case
If Watsco can show strong demand for HVAC products and maintain or improve profit margins, it could lead to a significant positive reaction in the stock.
Bear Case
Conversely, if the company fails to meet expectations or provides weak guidance, it could result in a sharp decline in the stock price, similar to past performance.
EPS
N/AEarnings per share (EPS) is a key indicator of the company's profitability and financial health.
Revenue
N/ARevenue growth will indicate how well Watsco is performing in a competitive market.
Market Demand
N/AUnderstanding market demand for HVAC products can provide insights into future revenue potential.
Expectations
The print will turn on these two things.
Q1
What is the expected EPS for Q2-2026?
The EPS figure will be crucial in determining market sentiment and expectations for future performance.
Q2
How is market demand for HVAC products trending?
Understanding demand trends will provide insights into Watsco's revenue potential and overall market health.
Edge
Why consensus could be wrong
The Street may be underestimating the potential for a rebound in HVAC demand, especially given recent trends in construction and home improvement.
Supporting Evidence
Options are pricing a 15.93% move, suggesting high volatility expectations that may not materialize.
The recent EPS beat indicates underlying strength that could continue into Q2.
Key Risk
If demand for HVAC products shows unexpected growth, it could significantly alter market expectations.
Edge
Pre-commit to what would confirm each case.
The market is weighing Watsco's ability to sustain profitability amid fluctuating demand in the HVAC sector.
Bull Confirmed If
An EPS of $2.00 or higher would confirm a strong bull case.
Bear Confirmed If
An EPS below $1.70 would confirm a bearish outlook.
Pre-Earnings Positioning
Implied Move
±15.93%
Historical Avg
±5.3%
The options market is pricing in a significant move, suggesting that investors expect volatility around the earnings announcement.
Options are pricing ±0.5% while WSO has averaged ±5.3% over the last 8 prints — setup is pricing cheap.
ATM IV
0.4%
30d HV
41.3%
Edge
Cross-company pattern from 30 similar setups.
Prior-quarter beat + options rich in Industrials
n=30Fade rate: 3 of 12 (25%)
This setup has occurred 30 times across Industrials in the last 2 years. 9 of 12 (75%) held or extended their move within 5 days — this setup typically holds direction. The average absolute 1-day move is 1.7%, with a raw directional average of -0.8% (modestly negative historical bias).
Preparation
Likely market behavior by outcome — not investment advice.
Beat & Raise
If Watsco beats expectations, history suggests a potential stock increase of around 2.85%, confirming positive market sentiment.
In-Line / Cautious
If results are in line with expectations, the stock may see a muted reaction as investors await further guidance.
Miss
A miss on earnings could lead to a decline of approximately 3.40%, reflecting investor disappointment.
Preparation
AI-powered briefs, options data, and 20 quarters of history — everything you need before earnings.
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Southern Copper Corporation