Watts Water (WTS) Q1 2026 Earnings Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 41 minutes ago
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Should l Buy WTS?
Source: NASDAQ.COM
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Analyst Views on WTS
Wall Street analysts forecast WTS stock price to rise
8 Analyst Rating
1 Buy
7 Hold
0 Sell
Hold
Current: 291.990
Low
275.00
Averages
295.83
High
312.00
Current: 291.990
Low
275.00
Averages
295.83
High
312.00
About WTS
Watts Water Technologies, Inc. is a supplier of differentiated solutions, systems and products that manage and conserve the flow of fluids and energy into, through and out of buildings in the commercial and residential markets. The Company's products and solutions include Residential & commercial flow control and protection products that include backflow preventers, water pressure regulators, temperature and pressure relief valves, thermostatic mixing valves, leak detection and others; Heating, ventilation and air conditioning (HVAC) & gas includes commercial high-efficiency boilers, water heaters and custom heat and hot water solutions, hydronic and electric heating systems, hydronic pump groups, and flexible stainless-steel connectors; Drainage & water re-use includes drainage products and engineered rainwater harvesting solutions; and Water quality products include point-of-use and point-of-entry water filtration, monitoring, conditioning and scale prevention systems.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Watts Water Technologies Reports Strong Q1 2026 Results with Record Sales and Dividend Increase
- Strong Performance: Watts Water Technologies reported Q1 2026 sales of $677 million, a 21% year-over-year increase, with organic sales rising 12%, demonstrating the company's dual advantages in pricing and volume, thereby solidifying its market position.
- Margin Improvement: The adjusted operating margin reached 20.1%, up 110 basis points year-over-year, primarily driven by enhancements in pricing, volume, and productivity, successfully offsetting tariff costs and inflationary pressures, which bolstered profitability.
- Dividend Increase: In light of robust cash flows and strong performance, Watts announced a 21% increase in dividends starting in June, reflecting the company's confidence in future growth and helping to attract more investor interest.
- Market Outlook: Despite facing uncertainties from the Middle East conflict and tariff issues, Watts maintains its full-year 2026 organic sales growth forecast of 2% to 6%, indicating a cautiously optimistic stance from management regarding market conditions.
See More
Watts Water (WTS) Q1 2026 Earnings Transcript
See More
Watts Water Technologies Named to USA Today's Climate Leaders List for Fourth Consecutive Year
- Climate Leadership Recognition: Watts Water Technologies has been named to USA Today's Climate Leaders list for the fourth consecutive year, indicating significant progress in reducing greenhouse gas emissions intensity and advancing sustainability goals, thereby reinforcing its leadership position in environmental stewardship.
- Emission Reduction Goals: CEO Robert J. Pagano announced new targets to reduce absolute carbon emissions by 10,000 MT by 2034 and to decrease water, GHG, and hazardous waste intensities by 3% annually, which will drive continued investment in sustainable technologies across the company.
- Significant Water Management Achievements: Since 2018, Watts has achieved a 62% reduction in water intensity, a 60% reduction in market-based emissions intensity, and a 35% reduction in hazardous waste intensity, significantly exceeding its original targets and demonstrating success in operational efficiency and resource conservation.
- Sustainability in Product Development: Watts integrates sustainability into its product development process, with solutions that enhance the efficiency and sustainability of the facilities they serve, while also supporting customers in achieving their own environmental goals, further promoting a green transition in the market.
See More
Market Rotation Signals: Focus on Emerging Growth Stocks
- Watts Water Technologies Performance: Watts Water Technologies reported a record $2.44 billion in sales for fiscal 2025, an 8% increase, with an operating margin of 18.4%, indicating strong profitability and cash flow, and is guiding for 8% to 12% sales growth in 2026.
- Data Center Infrastructure Demand: As an infrastructure provider for data centers, Watts focuses on cooling optimization and water management, with U.S. data center power demand projected to reach 106 gigawatts by 2035, driving market expansion in this sector.
- ATI Sales Growth: ATI Inc. achieved $4.6 billion in sales for fiscal 2025, a 5% increase, with aerospace and defense revenue now accounting for 68% of quarterly sales, highlighting its significant role in the global industrial renaissance.
- Supply Chain Advantage: ATI's extended titanium supply agreements with Boeing and Airbus, along with a new titanium alloy production facility, secure its critical position in the aerospace manufacturing supply chain, expected to enhance future cash flow growth.
See More
Watts and ATI: Investment Opportunities in AI Infrastructure
- Watts Strong Performance: Watts Water Technologies reported record sales of $2.44 billion for fiscal 2025, an 8% increase, with an operating margin of 18.4% and diluted earnings per share of $10.17, indicating robust profitability and strong cash flow, highlighting its growth potential in the AI infrastructure sector.
- Surging Data Center Demand: U.S. data center power demand is projected to reach 106 gigawatts by 2035, up from 25 gigawatts in 2024, positioning Watts at the center of this market demand through its advanced cooling optimization and water management solutions, with anticipated sales growth of 8% to 12% in 2026.
- ATI Sales Recovery: ATI Inc. achieved sales of $4.6 billion in fiscal 2025, a 5% increase, with aerospace and defense revenue now accounting for 68% of quarterly sales, underscoring the company's significant role in the global industrial renaissance, particularly as demand for high-performance titanium components in aviation rises.
- Long-Term Agreement Expansion: ATI's extension of titanium supply agreements with Boeing and Airbus, along with the launch of a new automated titanium alloy production facility, secures its critical position in the global aerospace manufacturing supply chain, expected to provide strong support for future growth.
See More
Hidden Growth Opportunities in Industrials Stocks
- Comfort Systems Market Expansion: Comfort Systems USA's technology-related project revenue accounted for 42% of its total in 2025, up 5 percentage points from the previous year, indicating strong demand in the data center construction sector that is expected to drive sustained growth ahead.
- Watts Water Performance Boost: Watts Water Technologies reported a record $625 million in Q4 2025 revenue, a 16% year-over-year increase, with an adjusted operating margin rising to 19%, highlighting the company's significant benefits from AI infrastructure demand.
- Mueller Water's Technological Innovation: Mueller Water Products is transforming from reactive maintenance to predictive maintenance through advanced sensors and software platforms offered by its Mueller Systems division, enhancing customer relationships and generating recurring revenue.
- Optimistic Industry Outlook: All three companies exhibit strong growth potential, with Comfort Systems trading at a P/E of 46, Watts at 28, and Mueller at 21.7, reflecting market confidence in their future growth, particularly driven by investments in AI and infrastructure.
See More
Watts Water Technologies Reports Strong Q1 2026 Results with Record Sales and Dividend Increase
- Strong Performance: Watts Water Technologies reported Q1 2026 sales of $677 million, a 21% year-over-year increase, with organic sales rising 12%, demonstrating the company's dual advantages in pricing and volume, thereby solidifying its market position.
- Margin Improvement: The adjusted operating margin reached 20.1%, up 110 basis points year-over-year, primarily driven by enhancements in pricing, volume, and productivity, successfully offsetting tariff costs and inflationary pressures, which bolstered profitability.
- Dividend Increase: In light of robust cash flows and strong performance, Watts announced a 21% increase in dividends starting in June, reflecting the company's confidence in future growth and helping to attract more investor interest.
- Market Outlook: Despite facing uncertainties from the Middle East conflict and tariff issues, Watts maintains its full-year 2026 organic sales growth forecast of 2% to 6%, indicating a cautiously optimistic stance from management regarding market conditions.
See More
Watts Water (WTS) Q1 2026 Earnings Transcript
See More
Watts Water Technologies Named to USA Today's Climate Leaders List for Fourth Consecutive Year
- Climate Leadership Recognition: Watts Water Technologies has been named to USA Today's Climate Leaders list for the fourth consecutive year, indicating significant progress in reducing greenhouse gas emissions intensity and advancing sustainability goals, thereby reinforcing its leadership position in environmental stewardship.
- Emission Reduction Goals: CEO Robert J. Pagano announced new targets to reduce absolute carbon emissions by 10,000 MT by 2034 and to decrease water, GHG, and hazardous waste intensities by 3% annually, which will drive continued investment in sustainable technologies across the company.
- Significant Water Management Achievements: Since 2018, Watts has achieved a 62% reduction in water intensity, a 60% reduction in market-based emissions intensity, and a 35% reduction in hazardous waste intensity, significantly exceeding its original targets and demonstrating success in operational efficiency and resource conservation.
- Sustainability in Product Development: Watts integrates sustainability into its product development process, with solutions that enhance the efficiency and sustainability of the facilities they serve, while also supporting customers in achieving their own environmental goals, further promoting a green transition in the market.
See More
Market Rotation Signals: Focus on Emerging Growth Stocks
- Watts Water Technologies Performance: Watts Water Technologies reported a record $2.44 billion in sales for fiscal 2025, an 8% increase, with an operating margin of 18.4%, indicating strong profitability and cash flow, and is guiding for 8% to 12% sales growth in 2026.
- Data Center Infrastructure Demand: As an infrastructure provider for data centers, Watts focuses on cooling optimization and water management, with U.S. data center power demand projected to reach 106 gigawatts by 2035, driving market expansion in this sector.
- ATI Sales Growth: ATI Inc. achieved $4.6 billion in sales for fiscal 2025, a 5% increase, with aerospace and defense revenue now accounting for 68% of quarterly sales, highlighting its significant role in the global industrial renaissance.
- Supply Chain Advantage: ATI's extended titanium supply agreements with Boeing and Airbus, along with a new titanium alloy production facility, secure its critical position in the aerospace manufacturing supply chain, expected to enhance future cash flow growth.
See More
Watts and ATI: Investment Opportunities in AI Infrastructure
- Watts Strong Performance: Watts Water Technologies reported record sales of $2.44 billion for fiscal 2025, an 8% increase, with an operating margin of 18.4% and diluted earnings per share of $10.17, indicating robust profitability and strong cash flow, highlighting its growth potential in the AI infrastructure sector.
- Surging Data Center Demand: U.S. data center power demand is projected to reach 106 gigawatts by 2035, up from 25 gigawatts in 2024, positioning Watts at the center of this market demand through its advanced cooling optimization and water management solutions, with anticipated sales growth of 8% to 12% in 2026.
- ATI Sales Recovery: ATI Inc. achieved sales of $4.6 billion in fiscal 2025, a 5% increase, with aerospace and defense revenue now accounting for 68% of quarterly sales, underscoring the company's significant role in the global industrial renaissance, particularly as demand for high-performance titanium components in aviation rises.
- Long-Term Agreement Expansion: ATI's extension of titanium supply agreements with Boeing and Airbus, along with the launch of a new automated titanium alloy production facility, secures its critical position in the global aerospace manufacturing supply chain, expected to provide strong support for future growth.
See More
Hidden Growth Opportunities in Industrials Stocks
- Comfort Systems Market Expansion: Comfort Systems USA's technology-related project revenue accounted for 42% of its total in 2025, up 5 percentage points from the previous year, indicating strong demand in the data center construction sector that is expected to drive sustained growth ahead.
- Watts Water Performance Boost: Watts Water Technologies reported a record $625 million in Q4 2025 revenue, a 16% year-over-year increase, with an adjusted operating margin rising to 19%, highlighting the company's significant benefits from AI infrastructure demand.
- Mueller Water's Technological Innovation: Mueller Water Products is transforming from reactive maintenance to predictive maintenance through advanced sensors and software platforms offered by its Mueller Systems division, enhancing customer relationships and generating recurring revenue.
- Optimistic Industry Outlook: All three companies exhibit strong growth potential, with Comfort Systems trading at a P/E of 46, Watts at 28, and Mueller at 21.7, reflecting market confidence in their future growth, particularly driven by investments in AI and infrastructure.
See More
