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Watts Water Technologies Inc

Watts Water Technologies Inc

WTS
$346.43USD↓-1.97%-6.97 today

MARKET CAP

11.6B

P/E (TTM)

30.8x

FWD P/E

27.8x

DAY RANGE

$346 – $356

52W RANGE

$247
$395

AI Summary

Stalk
TrimMedium

WTS remains in Stage 4 downtrend within a longer-term uptrend. Although a Bearish Exhaustion pattern and oversold readings hint at a short-term bounce, price remains below declining EMAs and active lower highs/lower lows. Medium-term bias remains bearish, with execution deferred until rallies into resistance near the EMAs and the 50-period moving average for trimming exposures.

  • ↑Q1 revenue $677.3M (+21.4% YoY), EPS $3.04 vs $2.72 est (+28% YoY)
  • ↑FY26 EPS consensus raised from $11.57 to $12.03, signaling stronger outlook
  • ↓Shares trade ~49% above intrinsic value, with a high P/E vs peers
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The case for & against

Bull & Bear analysis

Bearish

Watts Water Technologies, Inc. (NYSE: WTS) is a leading global provider of water management solutions, focusing on the design and manufacturing of plumbing, heating, and water quality products for residential, commercial, and industrial applications. The company positions itself at the forefront of growth trends in sustainability and efficient resource management, capitalizing on the increasing demand for innovative water-related solutions. Notably, Watts is strategically geared to benefit from the expanding data center market, having repositioned its portfolio to address the growing needs of this rapidly evolving sector.

Bull says

  • ↑Q1 revenue $677.3M (+21.4% YoY), EPS $3.04 vs $2.72 est (+28% YoY)
  • ↑FY26 EPS consensus raised from $11.57 to $12.03, signaling stronger outlook
  • ↑Data center segment targeting high double-digit growth, boosting momentum
  • ↑Dividend hiked 21% to $0.63, backed by net debt to capitalization of –9%
  • ↑Free cash flow of $7M with goal of ≥90% conversion shows capital discipline
  • ↑Strong earnings yield and positive analyst revisions suggest upside

Bear says

  • ↓Shares trade ~49% above intrinsic value, with a high P/E vs peers
  • ↓Free cash flow plunged from $46M to $7M, raising liquidity concerns
  • ↓60% of sales tied to repair/residential, vulnerable amid market softness
  • ↓Geopolitical uncertainty may dampen demand, especially in Middle East regions
  • ↓High interest-rate sensitivity risks further residential demand declines
  • ↓Elevated leverage and weak growth trends signal financial strain

Earnings Call · Q1 2026 · Mgmt. Guidance

Updated 05-12-2026neutral

Transcript signals

Bull points

  • Nexa continues to be a favorable story for us. We continue to grow that slow but surely. Team's making great progress.
  • To wrap up, we had a strong start to the year with record first quarter sales and earnings.
  • We're maintaining our full year outlook despite the macro and geopolitical uncertainty.

Bear points

  • Big remodeling is probably a little softer because people are deferring that.
  • the new construction markets are still soft and we're carefully watching that.
  • Our free cash flow for the quarter was $7 million compared to $46 million in the first quarter of last year. The cash flow decrease was primarily due to the increase in accounts receivable due to higher sales volume, increases in and timing of our annual customer rebate payments, and an increase in inventory related to incremental tariffs and our strategic investment in inventory.
Read full transcript analysis ›