Equity Profile

WSO

Watsco, Inc.

IndustrialsTrading Companies & Distributors$12.9B

Jul29Wed

Pre-Earnings Brief

UpcomingQ2-2026Pre-Market9:00 AM EDT

Company Snapshot

Watsco, Inc. (WSO) is a leading distributor of air conditioning, heating, and refrigeration equipment in North America....

Key Metrics to Watch

Earnings Per Share (EPS)

EPS is a key indicator of the company's profitability and is closely watched by investors.

N/A

Revenue Growth

Revenue growth reflects the company's ability to increase sales and expand its market share, which is vital in the competitive distribution industry.

N/A

1 more metrics, 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 air conditioning, heating, and refrigeration equipment in North America. As part of the industrials sector, Watsco plays a crucial role in the construction and home improvement markets, which are influenced by consumer spending and housing trends.

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 estimates by nearly 8%. However, the stock fell 4.03% the following day, indicating some investor disappointment despite the positive surprise.

Management Promises & Guidance

Expectations

Wall Street Expectations

Overall expectations for Watsco's upcoming earnings are mixed, with some analysts hoping for a rebound in EPS and revenue growth after recent misses. The market is watching closely for any signs of recovery in demand.

Bull Case

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

Bear Case

Conversely, if the company fails to meet expectations again, particularly in EPS or revenue, it may reinforce concerns about market demand and lead to further stock declines.

Expectations

Two Questions That Matter

The print will turn on these two things.

What will be the EPS for Q2-2026?

The EPS figure will be critical in assessing the company's profitability and could significantly influence investor sentiment.

How is Watsco addressing supply chain challenges?

Given the ongoing supply chain issues in the industry, management's insights on this topic will be crucial for understanding future revenue potential.

Edge

What the Street Is Missing

Why consensus could be wrong

The Street may be underestimating Watsco's ability to rebound from recent challenges, particularly if they can show improved operational efficiency and demand recovery.

Supporting Evidence

Watsco's recent EPS surprise suggests potential for better-than-expected performance.

The options market is pricing a lower move than historical averages, indicating a potential mispricing of volatility.

Past performance shows that Watsco has a tendency to recover quickly after earnings misses.

Key Risk

If the EPS comes in above $2.00, it could significantly shift investor sentiment towards a more bullish outlook.

Edge

Thesis-Break Levels

Pre-commit to what would confirm each case.

The market is debating whether Watsco can overcome recent operational challenges and return to growth, making these thresholds critical.

Bull Confirmed If

An EPS of $2.00 or higher would confirm a strong recovery and positive market sentiment.

Bear Confirmed If

An EPS below $1.70 would raise concerns about ongoing demand weakness and operational challenges.

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 uncertain but not overly bearish ahead of 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: 5 of 24 (21%)

This setup has occurred 30 times across Industrials in the last 2 years. 19 of 24 (79%) held or extended their move within 5 days — this setup typically holds direction. The average absolute 1-day move is 4.6%, with a raw directional average of +1.6% (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, the stock may experience a muted reaction as investors await more clarity on future guidance.

Miss

A miss could lead to a decline of around 3.40%, reinforcing concerns about the company's performance and market conditions.

Earnings Track Record

Preparation

What to Listen For

Call Prep

1Any updates on supply chain improvements and their impact on inventory levels.
2Details on pricing strategies in response to inflationary pressures.
3Insights into customer demand trends in the HVAC market.
4Management's outlook on the overall economic environment and its impact on future sales.
5Any commentary on cost management initiatives and their effectiveness.

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 air conditioning, heating, and refrigeration equipment in North America....

Key Metrics to Watch

Earnings Per Share (EPS)

EPS is a key indicator of the company's profitability and is closely watched by investors.

N/A

Revenue Growth

Revenue growth reflects the company's ability to increase sales and expand its market share, which is vital in the competitive distribution industry.

N/A

1 more metrics, 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 estimates by nearly 8%. However, the stock fell 4.03% the following day, indicating some investor disappointment despite the positive surprise.

Management Promises & Guidance

Expectations

Wall Street Expectations

Bull Case

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

Bear Case

Conversely, if the company fails to meet expectations again, particularly in EPS or revenue, it may reinforce concerns about market demand and lead to further stock declines.

Expectations

Two Questions That Matter

The print will turn on these two things.

What will be the EPS for Q2-2026?

The EPS figure will be critical in assessing the company's profitability and could significantly influence investor sentiment.

How is Watsco addressing supply chain challenges?

Given the ongoing supply chain issues in the industry, management's insights on this topic will be crucial for understanding future revenue potential.

Edge

What the Street Is Missing

Why consensus could be wrong

The Street may be underestimating Watsco's ability to rebound from recent challenges, particularly if they can show improved operational efficiency and demand recovery.

Supporting Evidence

Watsco's recent EPS surprise suggests potential for better-than-expected performance.

The options market is pricing a lower move than historical averages, indicating a potential mispricing of volatility.

Past performance shows that Watsco has a tendency to recover quickly after earnings misses.

Key Risk

If the EPS comes in above $2.00, it could significantly shift investor sentiment towards a more bullish outlook.

Edge

Thesis-Break Levels

Pre-commit to what would confirm each case.

The market is debating whether Watsco can overcome recent operational challenges and return to growth, making these thresholds critical.

Bull Confirmed If

An EPS of $2.00 or higher would confirm a strong recovery and positive market sentiment.

Bear Confirmed If

An EPS below $1.70 would raise concerns about ongoing demand weakness and operational challenges.

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 uncertain but not overly bearish ahead of 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: 5 of 24 (21%)

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, the stock may experience a muted reaction as investors await more clarity on future guidance.

Miss

A miss could lead to a decline of around 3.40%, reinforcing concerns about the company's performance and market conditions.

Earnings Track Record

Preparation

What to Listen For

Call Prep

1Any updates on supply chain improvements and their impact on inventory levels.
2Details on pricing strategies in response to inflationary pressures.
3Insights into customer demand trends in the HVAC market.
4Management's outlook on the overall economic environment and its impact on future sales.
5Any commentary on cost management initiatives and their effectiveness.