What happened with WSO today?
No read yet
Uses news and trading volume to explain the day’s move and how it relates to the market.
Stop guessing. Get the call, a three-month target price, the best and worst cases, and a source for every claim.
Watsco, Inc. buys equipment and supplies from manufacturers and sells them to contractors who replace or install systems in homes and commercial buildings. Contractors collect orders from its warehouses or receive deliveries. Air-conditioning and heating equipment generates most revenue; related parts and installation supplies contribute much of the rest, with commercial refrigeration a smaller business. Most sales come from the United States, and no single customer accounts for a large share.
The business depends heavily on Carrier, which supplies most of Watsco’s purchases and is its partner in joint ventures that generate most revenue. Maintaining product availability therefore relies heavily on that relationship. Some distribution agreements grant exclusive territories, while some branded-product agreements limit sales of competing products at the locations concerned.
Demand depends on replacement needs and new construction. Summer and winter weather affect seasonal sales, while housing completions influence demand for systems in new homes.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Watsco’s results hinge on demand for replacement heating and cooling systems and a concentrated supplier base, including privately held Rheem, which accounts for 8% of its purchases.
Watsco depends heavily on Carrier for the heating and cooling equipment it sells to contractors: Carrier supplied 62% of its purchases in 2025 and co-owned distribution ventures generating 53% of its revenue. Watch Carrier’s equipment deliveries, since interruptions could leave Watsco short of inventory and hurt its results.
Lennox both supplies heating and cooling equipment to Watsco and competes with it through Lennox Stores for contractors buying systems, replacement parts and supplies. Its store-channel news is worth watching for competition over the same contractor spending that supports Watsco’s sales.
Ferguson competes with Watsco in distributing heating and cooling products to residential and commercial customers in overlapping U.S. and Canadian markets. Watch Ferguson’s same-day and next-day product availability in the U.S., a service it identifies as an important customer requirement and a competitive advantage.
Housing Starts (Sep)
Watsco sells HVAC equipment and supplies to contractors for new homes, so housing construction that leads to completions can change contractors’ purchases and Watsco’s sales.
Expected1.31MLast release1.275M
If it comes in above expectations
If the reading is above the 1.31M estimate, it is above the previous 1.275M. More homes started or permitted points to more building and, if that leads to completions, may prompt contractors to buy more HVAC equipment and supplies from Watsco.
If it comes in below expectations
Fewer homes started or permitted points to less building and, if that leads to fewer completions, may prompt contractors to buy less HVAC equipment and supplies from Watsco.
Watsco, Inc. earningsThis company
Watsco’s report will show whether contractors are buying enough HVAC equipment to support the distributor’s sales and gross margin.
Read HVAC equipment sales alongside gross margin. Stabilizing equipment sales with a firm margin would show that contractor demand is improving without giving back the pricing and product-mix gains; weak sales or a lower margin would show that demand or price pressure still weighs on Watsco’s core business.
Lennox International Inc. earningsLII
Lennox’s report will show whether contractors are buying equipment and supplies through its stores, a channel that competes with Watsco for the same spending.
Look for evidence of demand through Lennox’s stores. Stronger store-channel activity would signal healthier contractor buying in a channel that competes with Watsco; weaker activity would point to pressure on that shared spending, though it would not establish Watsco’s own sales.
Carrier Global Corporation earningsCARR
Carrier’s report will show whether equipment deliveries are holding up; Carrier is both Watsco’s largest supplier and a partner in major distribution ventures.
Watch Carrier’s disclosures on equipment shipments and supply. Steady deliveries help Watsco keep inventory and serve contractors; interruptions could leave Watsco short of products and constrain sales. Carrier and Watsco also jointly own substantial distribution ventures, but Carrier’s overall results do not directly establish how those ventures performed.
