The strong beat supports near-term momentum, but the steep cash flow decline and maintained guidance suggest caution; watch for working capital improvement in coming quarters to validate margin strength.
Price Chart
Executive Summary
Watts Water Technologies reported record Q1 2026 results with net sales up 21% to $677M (12% organic) and adjusted EPS of $3.04, beating the $2.72 consensus by 12%. However, free cash flow plummeted to $6.6M from $45.6M a year ago and full-year guidance was maintained, creating mixed signals.
Key Financial Metrics
Key Facts
- Net sales $677.3M, up 21% reported, 12% organic
- Adjusted diluted EPS $3.04, up 28% YoY, beat consensus of $2.72 by 12%
- Operating margin 19.6% (GAAP), up 390 bps; adjusted 20.1%, up 110 bps
- Free cash flow $6.6M vs $45.6M in prior year quarter, down 86%
- Dividend increased 21% to $0.63/quarter
- Maintained full-year 2026 outlook: sales growth 8-12%, organic 2-6%, operating margin 18.8-19.4%
Financial Impact
Record sales and EPS beat, but cash flow weakness tempers gains
Risk Factors
- Free cash flow dropped 86% YoY due to working capital build
- Tariff and geopolitical uncertainties could pressure future results
- Maintained guidance implies limited visibility for acceleration
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001104659-26-056325 |
| Document: wts-20260506x8k.htm | 0001104659-26-056325 |
| Document: 0001104659-26-056325-index-headers.html | 0001104659-26-056325 |
| Document: 0001104659-26-056325-index.html | 0001104659-26-056325 |
| Document: 0001104659-26-056325.txt | 0001104659-26-056325 |
| 8-K Data (Synthetic) | 0001104659-26-056325 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
May 6, 2026 21w ago | 8-K | $294.14 $350.52 | ▲ +19.17% | ▲ +15.33% | $363.85 (+23.70%) |
Apr 1, 2026 26w ago | DEFA14A | $293.01 $358.93 | ▲ +22.50% | ▲ +9.12% | $363.85 (+24.18%) |
Mar 12, 2026 29w ago | Insider Cluster | $303.28 $314.21 | ▲ +3.60% | ▼ −7.09% | $363.85 (+19.97%) |
US Market Status
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