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The heating, air conditioning and refrigeration equipment company reported fourth-quarter earnings of $13 million, or 39 cents a share, on Wednesday. The performance was an increase from year-ago earnings of $10 million, or 31 cents. Analysts, on average, expected a profit of 35 cents a share.
"We expect a better HVAC market in 2012 as price/mix appears to have normalized and Watsco should have success with several company-specific growth initiatives," William Blair analysts wrote following the report.
Shares of Watsco hit a 52-week high of $74.13 on Wednesday. The stock's 52-week low of $50.45 was set on Oct. 4.
Watsco shares trade at a forward price-to-earnings ratio of 20.1X; the average for building materials and fixtures companies is 39.3X. For comparison,
Lennox International(LII) has a lower forward P/E of 12.7X and
Martin Marietta's(MLM) forward P/E is 12.7X.
Seven of the 12 analysts who cover Watsco rate it a buy. Three are at hold and the other two are at sell.
TheStreet Ratings gives Watsco a B+ grade with a buy rating and has a
$82.44 price target on the shares. The stock has risen 12.05% year to date.