Watts Water Technologies Q3 sales, adj EPS beat estimates

Overview

• Water technology products maker's Q3 sales rose 19%, beating analyst expectations

• Adjusted diluted EPS for Q3 climbed 36%, beating analyst expectations

• Company raised full-year 2026 sales and margin outlook

Outlook

• Company raises 2026 sales growth outlook to 17%-18% reported, 11%-12% organic

• Watts expects 2026 operating margin of 21.6%-21.7%, adjusted margin of 20.3%-20.4%

Result Drivers

• DATA CENTER DEMAND - Co said higher sales volumes were primarily driven by growth in data center applications and favorable price realization

• ACQUISITIONS - Acquisitions in the Americas and APMEA contributed to reported sales growth, along with a minor benefit from foreign exchange

• PRICE REALIZATION AND PRODUCTIVITY - Adjusted operating margin rose due to favorable pricing, higher sales volume leverage, and productivity gains, partly offset by inflation and acquisition dilution

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 7 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the industrial machinery & equipment peer group is "buy."

• Wall Street's median 12-month price target for Watts Water Technologies, Inc. is $408.72, about 13.4% above its November 3 closing price of $360.33

• The stock recently traded at 26 times the next 12-month earnings vs. a P/E of 27 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)