Core Insights - Watts Water (WTS) reported quarterly earnings of $3.09 per share, exceeding the Zacks Consensus Estimate of $2.68 per share, and up from $2.46 per share a year ago [1] - The earnings surprise was +15.30%, and the company has surpassed consensus EPS estimates for four consecutive quarters [2] - The company generated revenues of $643.7 million for the quarter, surpassing the Zacks Consensus Estimate by 6.10% and increasing from $597.3 million year-over-year [3] Financial Performance - The earnings surprise of +15.30% indicates strong performance relative to expectations [2] - Revenue growth of approximately 7.0% year-over-year reflects the company's ability to outperform market estimates consistently [3] - The stock has appreciated about 29.7% year-to-date, significantly outperforming the S&P 500's gain of 7.1% [4] Future Outlook - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $2.22 for the next quarter and $9.47 for the current fiscal year [5][8] - The favorable trend in estimate revisions prior to the earnings release has resulted in a Zacks Rank 2 (Buy) for the stock, suggesting expected outperformance in the near future [7] - The Instruments - Control industry, to which Watts Water belongs, is currently in the top 26% of Zacks industries, indicating a positive industry outlook [9]

Note changes in performance are relative to second quarter 2024 North Andover, Mass., August 6, 2025 -- Watts Water Technologies, Inc. (NYSE: WTS) – through its subsidiaries, one of the world's leading manufacturers and providers of plumbing, heating and water quality products and solutions – today announced results for the second quarter of 2025. Chief Executive Officer Robert J. Pagano Jr. said, "We delivered another strong quarter that surpassed our expectations as we achieved record sales, operating inc ...

Company Overview - Watts Water Technologies (NYSE: WTS) is a global leader in designing and manufacturing water solutions for various applications [1] - The company operates through three reportable segments: Americas, Europe, and Asia-Pacific, Middle East, and Africa (APMEA) [1] - Watts Water Technologies has a market capitalization of approximately $8.6 billion and employs nearly 1,000 people [1]

Core Insights - Watts Water (WTS) shares increased by 3.3% to close at $260.91, driven by higher trading volume and steady product momentum in the Americas and APMEA regions, despite weakness in Europe [1][4] Group 1: Financial Performance - The company is expected to report quarterly earnings of $2.68 per share, reflecting an 8.9% year-over-year increase, with revenues projected at $606.7 million, a 1.6% increase from the previous year [4] - The consensus EPS estimate for the quarter has been revised 1.4% higher in the last 30 days, indicating a positive trend that typically correlates with stock price appreciation [5] Group 2: Strategic Initiatives - Watts Water is focused on enhancing organic growth, margin expansion, and reinvesting in productivity initiatives, with plans for new product development and geographic expansion [2] - The company aims to launch smart and connected products to differentiate itself in the marketplace [2] - The expansion of go-to-market strategies is supported by positive customer feedback on value creation through risk mitigation, water savings, and enhanced comfort [3] Group 3: Market Position - Watts Water holds a Zacks Rank of 2 (Buy), indicating a favorable outlook compared to other stocks in the Zacks Instruments - Control industry [6] - In contrast, competitor Thermon Group (THR) has a Zacks Rank of 3 (Hold) and has seen a slight decline in stock performance [6][7]

Core Viewpoint - The market anticipates Watts Water (WTS) to report a year-over-year earnings increase driven by higher revenues, with a focus on how actual results compare to consensus estimates [1][2]. Earnings Expectations - Watts Water is expected to report quarterly earnings of $2.68 per share, reflecting an 8.9% increase year-over-year, with revenues projected at $606.7 million, up 1.6% from the previous year [3]. - The earnings report is scheduled for August 6, and better-than-expected results could lead to a stock price increase, while disappointing results may cause a decline [2]. Estimate Revisions - The consensus EPS estimate has been revised 1.37% higher in the last 30 days, indicating a positive reassessment by analysts [4]. - The Most Accurate Estimate for Watts Water is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +0.86%, suggesting a bullish outlook on the company's earnings [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10]. - Stocks with a positive Earnings ESP and a solid Zacks Rank have historically produced a positive surprise nearly 70% of the time [10]. Historical Performance - In the last reported quarter, Watts Water exceeded the expected earnings of $2.12 per share by delivering $2.37, resulting in a surprise of +11.79% [13]. - The company has beaten consensus EPS estimates in all of the last four quarters [14]. Conclusion - Watts Water is positioned as a compelling candidate for an earnings beat, but investors should consider other factors influencing stock performance beyond just earnings results [17].

Core Viewpoint - Watts Water (WTS) has consistently beaten earnings estimates and is well-positioned for future earnings growth, particularly highlighted by its recent performance and positive earnings expectations [1][6]. Earnings Performance - For the last reported quarter, Watts Water achieved earnings of $2.37 per share, surpassing the Zacks Consensus Estimate of $2.12 per share, resulting in a surprise of 11.79% [2]. - In the previous quarter, the company was expected to earn $1.91 per share but delivered $2.05 per share, yielding a surprise of 7.33% [2]. Earnings Estimates and Predictions - Estimates for Watts Water have been trending higher, supported by its history of earnings surprises, with an average surprise of 9.56% over the last two quarters [1][3]. - The company currently has an Earnings ESP of +0.86%, indicating a bullish outlook from analysts regarding its near-term earnings potential [6]. Zacks Rank and Earnings ESP - The combination of a positive Earnings ESP and a Zacks Rank of 2 (Buy) suggests a strong likelihood of another earnings beat in the upcoming report [6]. - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have historically produced positive surprises nearly 70% of the time [4].

Industry Overview - The Zacks Instruments – Control industry is positioned to benefit from a focus on energy-efficient production processes and integrated software systems, with rising demand for advanced technology to replace legacy industrial controls driving growth [1] - The industry comprises manufacturers of precision and specialty motion-control components and systems used across various sectors, providing solutions for flow measurement, control, and communication for air, water, and other gases and liquids [3] Growth Drivers - The industry's growth is primarily driven by the emphasis on digitized technologies in manufacturing, such as the Industrial Internet of Things, and the demand for process automation and safety automation systems [4] - Increased adoption of automation and higher investments in new technologies are expected to drive growth, particularly in North America, supported by rising infrastructural investments in the energy sector and favorable government policies [6] Challenges - Elevated customer inventory levels, high capital expenditures for infrastructure upgrades, and intense market volatility may hinder the process automation and instrumentation market [2] - Material cost inflation and rising transportation costs, along with high raw material prices due to geopolitical tensions, are affecting industry players' margins and profitability [5] Market Performance - The Zacks Instruments – Control industry has lagged behind the S&P 500 and the broader Zacks Computer and Technology sector over the past year, gaining only 2.2% compared to the S&P 500's 18.2% and the sector's 23.3% [9] - The industry has a trailing 12-month Enterprise Value-to-EBITDA (EV/EBITDA) ratio of 13.89X, which is below the S&P 500's 17.98X and the sector's 18.29X [12] Notable Companies - **Watts Water Technologies, Inc. (WTS)**: Focuses on water safety and flow control products, benefiting from cost-reduction actions and a strong balance sheet, with a long-term earnings growth expectation of 7.4% and a stock gain of 24.8% in the past year [15] - **Sensata Technologies Holding plc (ST)**: A global industrial technology company specializing in sensor-based solutions, with a long-term earnings growth expectation of 7.3% and a focus on electrification for hybrid and electric vehicles [18][19] - **Thermon Group Holdings, Inc. (THR)**: Provides engineered industrial process heating solutions, with a recent acquisition enhancing its market exposure and a long-term earnings surprise of 12.7% on average in the trailing four quarters [22]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the strategy of "buying high, hoping to sell even higher" [1] - The Zacks Momentum Style Score helps investors identify which metrics are effective for assessing momentum in stocks [2] Group 2: Watts Water (WTS) Analysis - Watts Water currently has a Momentum Style Score of B and a Zacks Rank of 2 (Buy) [3][4] - Over the past week, WTS shares increased by 3.8%, outperforming the Zacks Instruments - Control industry, which rose by 3.51% [6] - In the last quarter, WTS shares rose by 31.02%, and over the past year, they increased by 39%, compared to the S&P 500's gains of 19.67% and 12.87% respectively [7] Group 3: Trading Volume and Earnings Outlook - WTS has an average 20-day trading volume of 159,698 shares, indicating a bullish sign when combined with rising stock prices [8] - In the past two months, one earnings estimate for WTS increased, raising the consensus estimate from $9.28 to $9.42 [10] - The positive earnings outlook contributes to WTS's strong performance and momentum score [9][12]

Core Viewpoint - Watts Water (WTS) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is based solely on a company's changing earnings picture, tracking the Zacks Consensus Estimate for EPS from sell-side analysts [2]. - The Zacks rating upgrade for Watts Water reflects an optimistic earnings outlook, likely leading to increased buying pressure and a rise in stock price [4][6]. - The correlation between changes in earnings estimates and stock price movements is strong, with institutional investors using these estimates to determine fair value [5][7]. Company Performance - Watts Water is projected to earn $9.42 per share for the fiscal year ending December 2025, with no year-over-year change expected [9]. - Over the past three months, the Zacks Consensus Estimate for Watts Water has increased by 2.9%, indicating a positive trend in earnings estimates [9]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - The upgrade of Watts Water to a Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [11].

Core Viewpoint - Watts Water (WTS) shares have increased by approximately 2.5% since the last earnings report, which is underperforming compared to the S&P 500 [1] Group 1: Earnings Report and Market Reaction - The recent earnings report is crucial for understanding the catalysts affecting the stock's performance [1] - Investors and analysts are closely monitoring the stock as it approaches its next earnings release [1] Group 2: Estimates and Scores - Fresh estimates for Watts Water have trended upward over the past month, indicating positive sentiment [2] - The company has a Growth Score of B, a Momentum Score of C, and a Value Score of D, placing it in the bottom 40% for the value investment strategy [3] - The aggregate VGM Score for Watts Water is C, which is relevant for investors not focused on a single strategy [3] Group 3: Outlook - The upward trend in estimates suggests a promising outlook for the stock [4] - Watts Water holds a Zacks Rank of 3 (Hold), indicating expectations for an in-line return in the coming months [4]