4 models fit Watsco Inc. Common Stock and they partly agree: 2 of 4 land within 15% of the average. The price is above every model.
Two or more of our models back this value.
Large premium(i)
Valued as a mature, profitable company: Discounted cash flow, P/E comparison, EV/EBITDA comparison, Graham number, and Dividend discount.
ACCE opinionWatsco Inc. Common Stock (WSO)
Fair value (4 models)
$216
ACCE price target
$292
Rating
Overvalued
Horizon
12 months
Fair value published on 18 Oct 2026, 16:04 CEST; previously $250 since 14 Oct 2026, 00:00 CEST.
ACCE price target published on 26 Sept 2026, 00:00 CEST.
Rating published on 18 Oct 2026, 16:04 CEST.
Price used: $323 at the close on 23 Oct 2026, 22:00 CEST.
Models: Discounted cash flow, P/E comparison, EV/EBITDA comparison, and Graham number.
Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
Price vs fair value
49.7% above
-33.2% to fair value
ACCE score
42
out of 100
Analysts
21% buy
14 covering
P/E
25.8x
forward 24.3x
1-year return
-10.1%
Dividend yield
4.04%
Watsco Inc. Common Stock in four questions
Plain answers, details below
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Overview
ACCE thesis
Watsco distributes residential HVAC equipment, parts and supplies through a network of company-owned branches, mostly in the US, and is the largest distributor in that category. Its scale in a fragmented, replacement-driven market is the core advantage: the installed base of aging systems creates steady demand, and a broad branch footprint lets it stock and deliver parts faster than smaller rivals. Revenue growth of 2.1% is modest, and the stock trades at 25.0x trailing and 22.0x forward earnings, so the case rests on margin resilience and the replacement cycle rather than top-line acceleration. With a 16.7% return on equity and a 10.9% operating margin, the business is profitable, but the composite score of 41/100 and the lack of index membership suggest the market has not yet rewarded the franchise. The portfolio manager should look harder at whether the forward multiple already reflects a recovery in volumes that the 2.1% growth rate does not yet show.