Pursuant to the correction that has taken place in recent weeks with respect to the shares in Watts Water Technologies, Inc., further downside risk now appears limited by close and important technical support levels at 195.45 USD.
Summary
● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
● Overall, and from a short-term perspective, the company presents an interesting fundamental situation.
● The company has a good ESG score relative to its sector, according to Refinitiv.
Strengths
● The company is in a robust financial situation considering its net cash and margin position.
● Over the last twelve months, the sales forecast has been frequently revised upwards.
● For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner.
● The average price target of analysts who are interested in the stock has been strongly revised upwards over the last four months.
● There is high visibility into the group's activities for the coming years. Outlooks on future revenues from analysts covering the equity remain similar. Such hardly dispersed estimates support highly predictable sales for the current and upcoming fiscal years.
● Analysts' price targets are all relatively close, reflecting good visibility on the company's valuation.
● The group usually releases upbeat results with huge surprise rates.
Weaknesses
● With a 2023 P/E ratio at 25.21 times the estimated earnings, the company operates at rather significant levels of earnings multiples.
● The company appears highly valued given the size of its balance sheet.
● The firm pays small or no dividend to shareholders. For that reason, it is not a yield company.
Watts Water Technologies, Inc. is a supplier of products, solutions and systems that manage and conserve the flow of fluids and energy into, through and out of buildings. The Companyâs product lines include residential and commercial flow control products, such as backflow preventers, water pressure regulators, temperature and pressure relief valves, and leak detection products; heating, ventilation and air conditioning and gas products, which include water heaters and heating solutions, hydronic and electric heating systems for under-floor radiant applications, custom heat and hot water solutions and hydronic pump groups; drainage and water re-use products, which includes drainage and engineered rainwater harvesting solutions for commercial, industrial, marine and residential applications, and water quality products, such as point-of-use and point-of-entry water filtration and scale prevention systems. The Company also offers commercial washroom and emergency safety products.
WATTS WATER TECHNOLOGIES, INC. 
