Watts Water Technology, Inc. (WTS) continues to trade near its multi-year high after reporting better than expected Q2 results on August 3. Not only are estimates on the rise, but the valuation picture is in check too for this Zacks #1 rank stock.
Second-Quarter Results
Revenue for the period was up 5% from last year to $324 million. Earnings came in at 57 cents per share, 21% ahead of the Zacks Consensus Estimate calling for 47 cents. The company now has an average earnings surprise of 21% over the last four quarters.
Although China still represents a small portion of Watts’ business, it led all other regions with sales growth of 19% from last year to $5.6 million.
Balance Sheet
The company also continues to strengthen its balance sheet, with cash and equivalents up $76 million from last year to $255 million. Its total debt of $379 million is up a marginal $10 million from last year.
Estimates
The analysts were encouraged by the solid results, pushing the current-year estimate up 15 cents to $2.01 while the next-year estimate added 14 cents to $2.28, a 13% growth projection.
Valuation
Not only does WTS have some nice upward momentum, it also has value, trading with a forward P/E 15.5 against its peers 17X.
2-Year Chart
WTS continues to trade near its multi-year high at $37. Look for support from the trend line on any weakness, take a look below.
Read the June 16 WTS article here
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Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.
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