Watts Water (WTS Quick QuoteWTS - Free Report) shares rallied 3.8% in the last trading session to close at $333.11. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 6.5% gain over the past four weeks.

The increase in Watts Water’s share price reflects growing investor confidence in the company’s ability to deliver consistent growth and profitability despite a challenging macroeconomic environment.  Watts Water is gaining from strong pricing discipline, productivity improvements under its One Watts performance system and resilient demand across key end markets, which are supporting steady sales growth and margin expansion. Robust first-quarter 2026 results, combined with favorable pricing, volume leverage and operational efficiency, more than offset inflationary pressures, tariffs and acquisition-related dilution, enabling the company to maintain its full-year outlook.

The company is also benefiting from its focus on higher-growth opportunities and strategic portfolio expansion. Rapidly growing demand for data center cooling applications, increasing adoption of its Nexa intelligent water management platform and contributions from recent acquisitions are strengthening its revenue base and expanding its presence in attractive end markets. At the same time, continued investments in innovation, manufacturing capacity and inventory position the company to meet customer demand and capitalize on long-term infrastructure and industrial trends.

Additionally, Watts Water’s strong balance sheet and disciplined capital allocation strategy support its long-term prospects. Healthy cash generation, robust free cash flow expectations, dividend increases and share repurchases provide financial flexibility and enhance shareholder returns.

For 2026, the company expects reported sales growth of 8-12% and organic sales growth of 2-6%, while second-quarter guidance calls for reported sales growth of 10-14% and organic growth of 4-8%, indicating that its growth momentum remains intact despite near-term market uncertainties.

This maker of valves for plumbing, heating and water needs is expected to post quarterly earnings of $3.33 per share in its upcoming report, which represents a year-over-year change of +7.8%. Revenues are expected to be $725.03 million, up 12.6% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Watts Water, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on WTS going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Watts Water is a member of the Zacks Manufacturing - General Industrial industry. One other stock in the same industry, Watsco (WSO Quick QuoteWSO - Free Report) , finished the last trading session 1% lower at $380.46. WSO has returned -7.6% over the past month.

For Watsco, the consensus EPS estimate for the upcoming report has changed -3.4% over the past month to $4.17. This represents a change of -7.7% from what the company reported a year ago. Watsco currently has a Zacks Rank of #3 (Hold).