In Case You Missed It: Weekly Equity Market Commentary & Conviction Calls

Research evidence excerpt

In Case You Missed It: Weekly Equity Market Commentary & Conviction Calls

Barclays | In Case You Missed It

market exposure, reinforcing his preference for construction-exposed and self-help stories over

municipal-driven models. He sees ZWS as having attractive exposure to a non-res construction

recovery in Water Tech, driven by retrofit demand, limited muni exposure, and incremental

growth from new products and recurring filter revenue. He forecasts ~10% EBITDA/sh growth

and upside from buyback and M&A optionality, supporting a premium valuation relative to

peers and his coverage.

Watts Water Technologies Inc.: Upgrade to OW on data center growth opportunity (06/30/2026).

Will Grippin upgraded WTS to OW and lifted his PT to $414 from $317, noting greater confidence

in data center growth opportunity and several near-term catalysts. In his view, WTS is best

positioned among his coverage group to benefit from the data center capex cycle as the

company continues to expand its portfolio of targeted products that serve data center

plumbing, drainage, and cooling needs. He raised his 2026-2028 revenue estimates by ~2% as

he has more confidence in sustained above-MSD organic growth, which supports WTS above-

peer valuation multiple, in his view. Potential upcoming catalysts include: 1) Raised 2026

guidance, likely with 2Q26 results, 2) incremental data center disclosure, potentially including

clarity around WTS content per GW, and 3) new product introductions. In addition, he expects

WTS to demonstrate sustained organic growth above consensus of ~5% y/y for 2027-28E. A

recovery in residential housing would drive further upside that is not currently baked into his

estimates. Residential exposure comprised ~30% of WTS 2025 revenue.