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Investing.com - TD Cowen raised its price target on Watts Water Technologies (NYSE:WTS) to $225.00 from $180.00 on Tuesday, while maintaining a Hold rating on the stock. The company, currently trading near its 52-week high of $255.71, has demonstrated strong financial health, earning a "GREAT" rating from InvestingPro analysts.
The price target increase reflects potential positive earnings skew compared to previous outlooks, with China tariff impacts providing over 40 cents positive impact versus earlier expectations.
TD Cowen noted that end market conditions are likely not materially different from the previous outlook framework, while prices are higher on anticipated tariff mitigation and actual tariff impacts have been delayed.
The research firm indicated that the high end of revenue and margin assumptions are likely appropriate for Watts Water Technologies.
The new $225 price target implies approximately 14 times FY26 EV/EBITDA and 21.5 times FY26 P/E ratio for the water technologies company. Currently trading at an EV/EBITDA of 18x, the stock appears slightly overvalued according to InvestingPro’s Fair Value analysis. Discover 12 additional key insights about WTS and access comprehensive financial analysis through the Pro Research Report.
In other recent news, Watts Water Technologies reported strong financial results for Q1 2025, surpassing analysts’ expectations. The company achieved an adjusted earnings per share (EPS) of $2.37, exceeding the forecasted $2.12, while revenue reached $558 million, slightly above the anticipated $547 million. Watts Water Technologies also completed the acquisition of Icon (NASDAQ:ICLR), which is progressing ahead of schedule in terms of synergy tracking. Additionally, the company announced a 21% dividend increase starting in June, indicating a commitment to shareholder value.
Shareholders at Watts Water Technologies’ annual meeting approved all proposals, including the re-election of nine directors and the ratification of KPMG LLP as the independent auditor for 2025. Stifel recently raised its price target for Watts Water to $275, maintaining a Buy rating, based on the company’s digital strategy and competitive advantages. The research firm expressed confidence in Watts Water’s ability to navigate volatile market conditions.
These developments reflect Watts Water Technologies’ resilience and strategic positioning in the face of economic uncertainties. The company is maintaining its full-year organic sales outlook despite challenges in the macroeconomic environment. Watts Water Technologies remains focused on leveraging its global supply chain and manufacturing capabilities to mitigate the impact of tariffs and maintain its market position.
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