WSO Should I Buy
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WSO is not a good buy right now. The stock is trading $386, above the cluster of current Street price targets ($370) and near near-term resistance (R1 ~389.7 / R2 ~394.6) with mixed-to-cooling fundamentals (2025/Q3 revenue, EPS, and net income down YoY). With no Intellectia buy signals today and a generally Neutral/Underperform sell-side stance, the risk/reward for an impatient entry is unfavorable at this price; I would wait rather than chase.
Trend/price context: WSO closed at 386.45 (+0.79%) while the S&P 500 was down ~0.3%, showing relative resilience. Momentum: MACD histogram is positive (0.311) but contracting, implying bullish momentum is fading rather than strengthening. RSI: RSI(6) ~64.7 (upper-neutral), suggesting the stock is not oversold and is closer to short-term “warm” conditions than a dip-buy setup. Moving averages: Converging moving averages indicates consolidation/indecision rather than a clean trend. Levels: Pivot 381.66 is the key near-term line; holding above keeps the short-term tone constructive. Immediate resistance at R1 389.67 then R2 394.62; support at S1 373.65 then S2 368.70. Pattern-based forward look (provided): 80% chance of ~-1.47% next day, +1.64% next week, and -6.27% next month—skewing against buying aggressively right now for an impatient timeframe.
Fund flow/news: Giverny Capital initiated a new position in Watsco (incremental positive sentiment).
Macro/sector: Some Street commentary expects modest growth broadening in 2026 and potential tailwinds from rate cuts.
Profitability: 2025/Q3 gross margin improved (+5% YoY), indicating pricing/mix or cost control is helping despite softer sales.
Event: Upcoming QDEC 2025 earnings (2026-02-17 pre-market) can re-rate the stock if guidance surprises to the upside.
Sell-side setup: Recent price targets cluster around ~$370 (below the current ~$386), implying limited upside per consensus and making current levels look stretched.
Fundamentals (latest quarter): 2025/Q3 revenue (-4.31% YoY), net income (-5.19% YoY), and EPS (-5.69% YoY) all declined, pointing to a slowing demand environment.
Technical/near-term: Momentum is decelerating (MACD contracting) and price sits close to resistance, increasing the odds of a pullback.
Event risk: Earnings on 2026-02-17 could bring conservative guidance or sector softness commentary (Street already expects Q4 may not be a major catalyst).
Latest reported quarter: 2025/Q3. Growth: Revenue fell to ~$2.067B (-4.31% YoY). Net income fell to ~$150.9M (-5.19% YoY). EPS fell to 3.98 (-5.69% YoY). Quality: Gross margin rose to 27.52% (+5.00% YoY), a clear bright spot, but the top-line and earnings contraction reduces confidence for an impatient buy at a premium price level.
Recent trend: Predominantly Neutral, with targets generally reduced/held in the $349–$390 band; most recent targets sit at $370 (JPMorgan/Mizuho/UBS), while Wolfe is Underperform with a $349 target. Net takeaway: Wall Street is not positioned as a strong bull right now. Pros (Street view): Potential 2026 growth broadening, possible upside later if guidance proves conservative, and macro tailwinds from easing rates. Cons (Street view): Valuation/price appears ahead of targets, sector demand seen as uneven, and limited near-term catalyst expectation for Q4. Influential/political activity: No recent congress trading data available; hedge funds and insiders are noted as Neutral with no significant recent trends.
Intellectia Proprietary Trading Signals
