Watts Water Technologies, Inc. (NYSE:WTS) investors will be delighted, with the company turning in some strong numbers with its latest results. Results were good overall, with revenues beating analyst predictions by 5.1% to hit US$763m. Statutory earnings per share (EPS) came in at US$3.53, some 5.2% above whatthe analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Taking into account the latest results, the consensus forecast from Watts Water Technologies' ten analysts is for revenues of US$2.83b in 2026. This reflects a credible 5.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 10% to US$12.65. In the lead-up to this report, the analysts had been modelling revenues of US$2.74b and earnings per share (EPS) of US$12.10 in 2026. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

It will come as no surprise to learn that the analysts have increased their price target for Watts Water Technologies 9.7% to US$393on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Watts Water Technologies at US$447 per share, while the most bearish prices it at US$320. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Watts Water Technologies' growth to accelerate, with the forecast 12% annualised growth to the end of 2026 ranking favourably alongside historical growth of 7.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Watts Water Technologies to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Watts Water Technologies' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Watts Water Technologies. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Watts Water Technologies analysts - going out to 2028, and you can see them free on our platform here.

You still need to take note of risks, for example - Watts Water Technologies has 1 warning sign we think you should be aware of.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.