Oppenheimer analyst Bryan Blair maintained a Hold rating on Watts Water Technologies (WTS) yesterday. The company’s shares closed on Friday at $81.79.
Blair observed:
“Shares jumped 13% vs. XLI flat after WTS reported adj. 4Q18 EPS of $0.88 (above our $0.83E), marking record 4Q sales, adj. operating margin, and earnings. Given slightly moderating end markets (Americas, most importantly, expected to sustain +MSD topline trajectory), management guided to 2019 core sales growth of +3-4% y/y. Combining favorable volume trends, price/cost, and restructuring benefits, adj. margins were guided to expand +50-70bps y/y to 12.8-13.0%. All in, we believe WTS is well positioned to generate +HSD (possibly +LDD) earnings growth in 2019, with accelerating contributions from its connected strategy (targeting 25% connected product sales by 2023 vs. current HSD levels) potentially driving stronger performance intermediate term. The uncertain outlook for European operations and valuation (~20x P/E) keep us on the sidelines.”
According to TipRanks.com, Blair is a 1-star analyst with an average return of -2.0% and a 48.4% success rate. Blair covers the Industrial Goods sector, focusing on stocks such as Carlisle Companies Incorporated, Mueller Water Products, and Rexnord Corporation.
Watts Water Technologies has an analyst consensus of Moderate Buy, with a price target consensus of $90, which is a 10.0% upside from current levels. In a report issued on February 8, Boenning & Scattergood also maintained a Hold rating on the stock.
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The company has a one-year high of $93.35 and a one-year low of $61.17. Currently, Watts Water Technologies has an average volume of 122.8K.
Based on the recent corporate insider activity of 77 insiders, corporate insider sentiment is negative on the stock. Most recently, in December 2018, Elie Melhem, the President- APAC, M. East, Afr. of WTS sold 9,173 shares for a total of $641,233.
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Watts Water Technologies, Inc. engages in the manufacture and provision of products for water conservation, safety, and flow control. It operates through the following geographic segments: Americas, Europe, and APMEA. Its services include plumbing and flow control solutions, water quality and conditioning, water reuse and drainage, heating, ventilation, and air conditioning, and municipal waterworks. The company was founded in 1985 and is headquartered in North Andover, MA.
