$WSO — HOLD 📊 | 6 MONTHS THESIS

Watsco, Inc., together with its subsidiaries, engages in the distribution of air conditioning, heating, and refrigeration equipment, and related parts and supplies in the United St 🎯 FQ2 FY2026 (ends Jun) | reported Jul 29 | Rev $2.1B | Adj EPS $4.00 vs $4.39 🔴 | GAAP EPS $4.59 | GAAP op margin 11.3% 💡 Market expected about $4.39 EPS; actual $4.00 was a ~9% miss. More important than the beat/miss is the signal that gross margin compressed 180bps and demand stayed soft into mid-2026. The stock already fell sharply from the $385 area, suggesting negative revisions are partly priced. 🏢 Business Quality: 8/10 📊 Valuation: At $310.8 with ~35.59M shares, market cap is ~$12.87B. Trailing P/E is ~27x on declining 2026 H1 earnings; on roughly $12.20 normalized FY2025 EPS... 🔮 Catalyst: Q3 FY2026 earnings (est. Oct 28,2026) / gross margin stabilization at or above 28% and flat-to-positive same-store sales, with Jackson Supply integration contribution / failure would be gross margin below 27%, ne

Watsco, Inc., together with its subsidiaries, engages in the distribution of air conditioning, heating, and refrigeration equipment, and related parts and supplies in the United St