Equity Profile

WSO

Watsco, Inc.

IndustrialsTrading Companies & Distributors$16.2B

Jul29Wed

Pre-Earnings Brief

UpcomingQ2-2026Pre-Market9:00 AM EDT

Company Snapshot

Watsco, Inc. (WSO) is a leading distributor of HVAC (heating, ventilation, and air conditioning) products in North America....

Key Metrics to Watch

EPS (Earnings Per Share)

EPS is a crucial indicator of the company's profitability and financial health, which investors closely monitor.

Not available

Revenue Growth

Revenue growth will indicate how well Watsco is capturing market demand and managing its operations.

Not available

Wall Street expectations, options signals, track record, and call prep available with Pro.

WSO Q2-2026 Earnings Preview

Context

Company Snapshot

Watsco, Inc. (WSO) is a leading distributor of HVAC (heating, ventilation, and air conditioning) products in North America. As a key player in the industrial sector, Watsco benefits from trends in construction and consumer spending, making its performance relevant to broader economic conditions.

Earnings Scorecard·Last 8Q

EPS Beat Streak

EPS Beat Rate

25%

Avg EPS Surprise

-5.04%

Avg Stock Reaction

-1.83%

Last Quarter Recap

In Q1-2026, Watsco reported an EPS of $1.87, exceeding expectations by nearly 8%. However, the stock fell by 4.03% the following day, indicating market concerns despite the earnings beat.

Management Promises & Guidance

Expectations

Wall Street Expectations

Overall, expectations for Watsco's upcoming earnings are uncertain, especially given the mixed results from previous quarters. Analysts are looking for signs of stability in earnings and revenue growth.

Bull Case

If Watsco can demonstrate strong revenue growth and improved margins, it could signal a recovery in demand for HVAC products, leading to a positive market reaction.

Bear Case

Conversely, if the company reports disappointing earnings or guidance, it may reinforce concerns about slowing demand in the construction sector, leading to a negative stock reaction.

Expectations

Two Questions That Matter

The print will turn on these two things.

What will be the EPS for this quarter?

Given the mixed results in recent quarters, the EPS figure will be critical in assessing the company's profitability and market confidence.

How is Watsco addressing supply chain challenges?

Supply chain issues have impacted many companies; understanding Watsco's strategy will be key to evaluating its operational efficiency and future performance.

Edge

What the Street Is Missing

Why consensus could be wrong

The market may be underestimating Watsco's ability to capitalize on a rebound in construction activity, which could lead to stronger-than-expected revenue growth this quarter.

Supporting Evidence

The historical trend shows that Watsco has a 25% beat rate, suggesting potential for upside surprises.

Options pricing indicates a lower expected move compared to historical averages, suggesting the market may be overly cautious.

Key Risk

If revenue growth exceeds 10%, it could challenge the current cautious sentiment in the market.

Edge

Thesis-Break Levels

Pre-commit to what would confirm each case.

This quarter's performance is pivotal as it will reflect Watsco's ability to navigate market challenges and capitalize on demand in the HVAC sector.

Bull Confirmed If

A revenue growth rate exceeding 10% would confirm the bull case, indicating strong demand recovery.

Bear Confirmed If

A decline in revenue or an EPS below $1.80 would confirm the bear case, raising concerns about market demand.

Pre-Earnings Positioning

Options Market

Implied Move

±2.55%

Historical Avg

±5.3%

Pricing cheap

The options market is pricing in a modest move, suggesting that investors are anticipating a relatively stable reaction to the earnings report.

Options are pricing ±2.5% while WSO has averaged ±5.3% over the last 8 prints — setup is pricing cheap.

Detail

ATM IV

0.4%

30d HV

33.0%

Calls (25K)P/C Ratio: 0.22Puts (4K)

Edge

Historical Setup Match

Cross-company pattern from 30 similar setups.

Prior-quarter beat + options pricing cheap in Industrials

n=30

Fade rate: 6 of 24 (25%)

This setup has occurred 30 times across Industrials in the last 2 years. 18 of 24 (75%) held or extended their move within 5 days — this setup typically holds direction. The average absolute 1-day move is 4.7%, with a raw directional average of +1.7% (modestly positive historical bias).

Preparation

Post-Print Playbook

Likely market behavior by outcome — not investment advice.

Beat & Raise

If Watsco beats expectations, history suggests the stock could rise by about 2.85%, confirming a positive outlook for the company.

In-Line / Cautious

If results are in line with expectations but management offers cautious commentary, the stock may remain stable or see a slight decline.

Miss

If Watsco misses earnings expectations, the average historical reaction indicates a potential drop of around 3.40%, reflecting market disappointment.

Earnings Track Record

Preparation

What to Listen For

Call Prep

1Any updates on supply chain improvements and their impact on product availability.
2Insights into customer demand trends in the HVAC market.
3Management's outlook on the construction sector and its implications for future revenue.
4Details on cost management strategies and their effects on margins.
5Any commentary on competitive pressures and market share.

See the full picture

AI-powered briefs, options data, and 20 quarters of history — everything you need before earnings.

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Company Snapshot

Watsco, Inc. (WSO) is a leading distributor of HVAC (heating, ventilation, and air conditioning) products in North America....

Key Metrics to Watch

EPS (Earnings Per Share)

EPS is a crucial indicator of the company's profitability and financial health, which investors closely monitor.

Not available

Revenue Growth

Revenue growth will indicate how well Watsco is capturing market demand and managing its operations.

Not available

Wall Street expectations, options signals, track record, and call prep available with Pro.

WSO Q2-2026 Earnings Preview

Context

Company Snapshot

Earnings Scorecard·Last 8Q

EPS Beat Streak

EPS Beat Rate

25%

Avg EPS Surprise

-5.04%

Avg Stock Reaction

-1.83%

Last Quarter Recap

In Q1-2026, Watsco reported an EPS of $1.87, exceeding expectations by nearly 8%. However, the stock fell by 4.03% the following day, indicating market concerns despite the earnings beat.

Management Promises & Guidance

Expectations

Wall Street Expectations

Bull Case

If Watsco can demonstrate strong revenue growth and improved margins, it could signal a recovery in demand for HVAC products, leading to a positive market reaction.

Bear Case

Conversely, if the company reports disappointing earnings or guidance, it may reinforce concerns about slowing demand in the construction sector, leading to a negative stock reaction.

Expectations

Two Questions That Matter

The print will turn on these two things.

What will be the EPS for this quarter?

Given the mixed results in recent quarters, the EPS figure will be critical in assessing the company's profitability and market confidence.

How is Watsco addressing supply chain challenges?

Supply chain issues have impacted many companies; understanding Watsco's strategy will be key to evaluating its operational efficiency and future performance.

Edge

What the Street Is Missing

Why consensus could be wrong

The market may be underestimating Watsco's ability to capitalize on a rebound in construction activity, which could lead to stronger-than-expected revenue growth this quarter.

Supporting Evidence

The historical trend shows that Watsco has a 25% beat rate, suggesting potential for upside surprises.

Options pricing indicates a lower expected move compared to historical averages, suggesting the market may be overly cautious.

Key Risk

If revenue growth exceeds 10%, it could challenge the current cautious sentiment in the market.

Edge

Thesis-Break Levels

Pre-commit to what would confirm each case.

This quarter's performance is pivotal as it will reflect Watsco's ability to navigate market challenges and capitalize on demand in the HVAC sector.

Bull Confirmed If

A revenue growth rate exceeding 10% would confirm the bull case, indicating strong demand recovery.

Bear Confirmed If

A decline in revenue or an EPS below $1.80 would confirm the bear case, raising concerns about market demand.

Pre-Earnings Positioning

Options Market

Implied Move

±2.55%

Historical Avg

±5.3%

Pricing cheap

The options market is pricing in a modest move, suggesting that investors are anticipating a relatively stable reaction to the earnings report.

Options are pricing ±2.5% while WSO has averaged ±5.3% over the last 8 prints — setup is pricing cheap.

Detail

ATM IV

0.4%

30d HV

33.0%

Calls (25K)P/C Ratio: 0.22Puts (4K)

Edge

Historical Setup Match

Cross-company pattern from 30 similar setups.

Prior-quarter beat + options pricing cheap in Industrials

n=30

Fade rate: 6 of 24 (25%)

Preparation

Post-Print Playbook

Likely market behavior by outcome — not investment advice.

Beat & Raise

If Watsco beats expectations, history suggests the stock could rise by about 2.85%, confirming a positive outlook for the company.

In-Line / Cautious

If results are in line with expectations but management offers cautious commentary, the stock may remain stable or see a slight decline.

Miss

If Watsco misses earnings expectations, the average historical reaction indicates a potential drop of around 3.40%, reflecting market disappointment.

Earnings Track Record

Preparation

What to Listen For

Call Prep

1Any updates on supply chain improvements and their impact on product availability.
2Insights into customer demand trends in the HVAC market.
3Management's outlook on the construction sector and its implications for future revenue.
4Details on cost management strategies and their effects on margins.
5Any commentary on competitive pressures and market share.