Is It Too Late To Consider Watts Water Technologies (WTS) After A 41% One Year Rally?

Simply Wall St

Wed, February 11, 2026 at 1:35 PM GMT+9 6 min read

In this article:

•                                       StockStory Top Pick 
  

  WTS

  -1.48%

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE.

If you are wondering whether Watts Water Technologies still represents good value after a strong share price run, or if you may be late to the story, this article walks through what the current price may be implying.

The stock last closed at US$315.02, with returns of 3.6% over 7 days, 9.6% over 30 days, 13.1% year to date, 41.3% over 1 year, 81.4% over 3 years and 170.6% over 5 years. This naturally raises questions about what is already priced in.

Recent company updates and industry commentary around water infrastructure and efficiency solutions have kept investor attention on Watts Water Technologies, as markets track how it is positioned within this theme. This backdrop helps frame the recent share price moves and is important context before you weigh up what the current valuation might be telling you.

On Simply Wall St's framework the company has a valuation score of 1 out of 6. This sets up a closer look at multiples, cash flow based approaches and, later in the article, a different way of thinking about valuation altogether.

Watts Water Technologies scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Watts Water Technologies Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes estimates of the cash a business could generate in the future and discounts those amounts back to today, to arrive at an estimated value per share.

For Watts Water Technologies, the model used here is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about $349.7 million. Analysts provide explicit free cash flow estimates for the next few years, and Simply Wall St then extends those projections further. By 2029, projected free cash flow is $502.3 million, with additional extrapolated figures out to 2035.

Discounting these projected cash flows back to today results in an estimated intrinsic value of about $290.35 per share. Compared with the recent share price of US$315.02, the model suggests the stock is roughly 8.5% above this DCF estimate. This places it in a fairly valued range rather than clearly cheap or expensive on this measure.

Result: ABOUT RIGHT

Watts Water Technologies is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment’s notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Story Continues  

WTS Discounted Cash Flow as at Feb 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Watts Water Technologies.

Approach 2: Watts Water Technologies Price vs Earnings

For a profitable company, the P/E ratio is a useful shorthand because it links what you pay for each share to the earnings that business is currently generating. It gives you a quick way to think about how many dollars of share price you are paying for each dollar of earnings.

What counts as a “normal” P/E depends on what the market expects and how risky those earnings look. Higher growth expectations or lower perceived risk can justify a higher multiple, while lower growth or higher risk usually points to a lower, more conservative range.

Watts Water Technologies currently trades on a P/E of 32.36x. That sits above the Machinery industry average of about 29.67x and below the peer group average of 37.70x. Simply Wall St also calculates a proprietary “Fair Ratio” of 24.28x, which reflects what its P/E might be given factors such as earnings growth, profit margins, industry, market cap and specific risks.

This Fair Ratio can be more tailored than a simple comparison with peers or the industry because it adjusts for the company’s own growth outlook and risk profile rather than assuming all Machinery stocks should trade on the same multiple. Set against the current 32.36x P/E, the Fair Ratio of 24.28x indicates the shares are pricing in more optimism than this framework suggests.

Result: OVERVALUED

NYSE:WTS P/E Ratio as at Feb 2026

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 23 top founder-led companies.

Upgrade Your Decision Making: Choose your Watts Water Technologies Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, an approach on Simply Wall St’s Community page that lets you connect your view of Watts Water Technologies to a set of forecast numbers and a Fair Value that you can compare with the current share price.

A Narrative is simply your story about the company, written in numbers as well as words, where you set assumptions for future revenue, earnings, margins and the P/E you think is reasonable, then see what Fair Value those assumptions imply.

Because Narratives sit on the platform used by millions of investors, you can see how different viewpoints translate into different Fair Values, such as a more cautious stance closer to US$225 and a more optimistic stance around US$340, all updated automatically when new earnings, guidance or news arrive.

This makes Narratives a practical way to decide whether the current US$315.02 price looks high, low or about right next to your own Fair Value, instead of relying only on static DCF or P/E comparisons.

For Watts Water Technologies however we will make it really easy for you with previews of two leading Watts Water Technologies Narratives:

🐂 Watts Water Technologies Bull Case

Fair value in this bullish Narrative: US$340.00 per share

Implied discount to this fair value versus the latest US$315.02 close: about 7.4% undervalued

Annual revenue growth assumption in this Narrative: 7.03%

Backs a premium P/E framework where the company supports a higher multiple through recurring, high margin and digitally enabled water management solutions.

Assumes continued benefit from integrations like I CON Systems, automation and a broad manufacturing footprint that together support margins and growth.

Frames risks around mature core markets, competition, tariffs and technology shifts that could restrain long term growth or pressure margins if they play out differently.

🐻 Watts Water Technologies Bear Case

Fair value in this more cautious Narrative: US$292.50 per share

Implied premium to this fair value versus the latest US$315.02 close: about 7.7% overvalued

Annual revenue growth assumption in this Narrative: 6.20%

Uses a slightly lower fair value with a future P/E of 27.74x. This is closer to a consensus style view that sees the shares not far from where this Narrative puts intrinsic value.

Builds in steady revenue and margin progress supported by water infrastructure demand, while also reflecting a higher discount rate than the bullish case.

Highlights risks around Europe, tariffs, slower digital adoption and mixed segment volumes that could limit how far earnings and multiples can stretch from here.

These two Narratives give you a clear range around Watts Water Technologies, from a fair value of US$292.50 up to US$340.00, so you can decide which set of assumptions feels closer to how you see the business and its current US$315.02 share price.

Curious how numbers become stories that shape markets? Explore Community Narratives

Do you think there’s more to the story for Watts Water Technologies? Head over to our Community to see what others are saying!

NYSE:WTS 1-Year Stock Price Chart

_ 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._

Companies discussed in this article include WTS.

Have feedback on this article? Concerned about the content? Get in touch with us directly._ Alternatively, email editorial-team@simplywallst.com_

Terms and Privacy Policy

Privacy Dashboard

More Info