Stifel cuts Watts Water stock price target on rate outlook concerns

Watts Water Technologies reported record Q2 sales, driven by data center demand, and raised its full-year sales and adjusted operating margin outlook. The company faces margin pressures from acquisitions, inflation, tariffs, and restructuring costs. Analysts project $3.2B revenue and $537.4M earnings by 2029, with a potential 8% upside from current share price.

Watts Water Technologies (WTS) reported Q2 2026 net sales of $763M, up 19% YoY, with EPS at $3.53. Data center demand drove growth, especially in APMEA (+57%). However, operating margins fell 80 bps to 20.2% due to acquisition dilution, inflation, and tariffs. The company raised its full-year sales outlook and increased its dividend to $0.63 per share.

Watts Water (WTS) shares fell 5.7% since its last earnings report, despite Q2 2026 adjusted earnings of $3.66 per share, up 18.4% YoY, and net sales of $763.2M, up 18.6% YoY. Growth was driven by data center demand, particularly in the Americas and APMEA. The company raised its full-year sales growth outlook to 14-17% and maintained its dividend. Analysts have upgraded estimates, giving WTS a Zacks Rank #2 (Buy).

Watts Water Technologies (NYSE:WTS) raised its data center served addressable market estimate to about $2 billion from over $1 billion, citing broader global demand and liquid-cooling adoption. Q2 adjusted EBITDA rose 15% to $177 million. Watts lifted full-year organic sales growth to 8% to 11% and reported sales to 14% to 17%.

Watts Water Technologies reported revenue of $763m, 5.1% above analyst estimates, and statutory EPS of $3.53, 5.2% above expectations. Analysts’ 2026 consensus forecasts rose to $2.83b revenue and $12.65 EPS. The consensus price target increased 9.7% to $393, with targets ranging $320 to $447.

Watts Water Technologies (WTS) shares rose about 4% to around $392 after Q2 results. The company reported Q2 revenue of $763.2m (+18.6% YoY) and basic EPS of $3.53 (+17.2%). Watts cited record margins and raised full-year margin guidance; data center solutions more than tripled YoY and were about 8% of YTD revenue.