Watts Water Technologies (WTS) · Q2 2026 results and valuation

At 7.2% growth a year (3-year revenue growth), the model's fair value is $209.55 a share — the stock trades 72% above it. Today's price assumes 14.7% growth a year.

1. Key theme

   Its balance sheet is strong and its cash flow is healthy, and Watts Water Technologies has ample flexibility to support its disciplined…

   Source quote

   “Our balance sheet is strong and our cash flow is healthy, and we have ample flexibility to support our disciplined... We are monitoring the macro environment, including tariffs, interest rates and geopolitical development and we believe we are well positioned to navigate those uncertainties. We'll continue to deploy capital to high-return opportunities that will help us deliver sustainable profitable growth and create value for our shareholders.”

2. Guidance

   Full-year data center sales are now expected to reach mid- to high single digits of total sales, up from 3% previously.

   Source quote

   “We now expect data center sales for the full year to represent mid- to high single digits as a percentage of overall company sales compared with just 3%...”

3. Guidance

   Second-half results should improve seasonally, and the full-year free cash flow conversion goal remains on track.

   Source quote

   “We expect seasonal sequential improvement in the second half of the year and are on track to achieve our full year goal of free cash flow conversion greater...”

Script and answers carried a similar tone, so the script's message held up under questioning.

Sentences that drove the tone

“As we discussed throughout the call, data centers are an important growth opportunity and also a good example of how we are successfully targeting additional growth markets.”

“We'll continue to deploy capital to high-return opportunities that will help us deliver sustainable profitable growth and create value for our shareholders.”

“We've made meaningful progress against our second generation of environmental goals while expanding innovative solutions that improve safety, water conservation and energy efficiency.”