Mizuho has updated its price target for Watsco (WSO, Financial), lowering it to $525 from a previous $540, while maintaining a Neutral rating on the stock. This adjustment comes ahead of the earnings season, as the firm anticipates a slowdown in near-term demand due to external economic pressures.
The adjustment reflects concerns regarding the impact of tariffs, with specific emphasis on those involving China, which are expected to affect financial results. Although early indicators show first-quarter performance aligning with expectations, investors remain focused on the broader market developments rather than short-term results.
The escalating tariff situation is prompting companies to preemptively increase prices. However, Mizuho cautions that these efforts might not fully offset the anticipated challenges, as some adverse effects and unaddressed obstacles could still persist in the financial landscape.
