Analyst Jeff Germanotta of William Blair & Co. investment firm, who began research coverage of Watsco (Coconut Grove, Fla.), said, “Within its HVAC business, Watsco has demonstrated its capacity to generate growth from both internal and external opportunities, including the integration of 47 acquisitions since 1989.”

The investment firm began its research of the distributor in May and will complete a market perform rating and a company profile of core growth. Germanotta estimated that the company would earn $2.20 in fiscal 2005 and $2.63 per share in fiscal 2006.

“Watsco should continue to capitalize on multiple long-term secular dynamics such as the rising trend in homeownership, the increasing average size of new homes, aging of the housing stock, the replacement cycle for HVAC equipment, and federally mandated increases in the energy efficiency of HVAC equipment,” he added. “We believe Watsco will continue its geographic expansion program within the HVAC segment, acquiring distributors with established market positions, subsequently growing revenue and profits from a combination of adding locations, products, services, and improved management practices.”