Zacks Investment Research Downgrades A.O. Smith Corp. (AOS) to Hold
A.O. Smith Corp. (NYSE:AOS) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a note issued to investors on Wednesday.
According to Zacks, “A.O. Smith has an excellent earnings surprise history, beating estimates each time in the trailing four quarters. The company’s dominant foothold in the North American water heater market, along with thriving prospects in residential and commercial boiler markets are expected to boost growth. Going forward, the recent acquisition of residential water treatment firm, Aquasana, is expected to bolster core business. Also, the company’s thriving business in China is expected to act as a major catalyst, going forward. However, on the flip side, appreciation in steel prices since the beginning of the year is expected to put margins under pressure. Also, devaluation of the Chinese currency and escalating SG&A and other corporate expenses are expected to act as significant headwinds in the forthcoming quarters. Also, strong competition in the water boilers and heaters industry compounds the company’s challenges.”
A number of other research analysts have also recently commented on the company. KeyCorp reaffirmed a “buy” rating and set a $107.00 target price on shares of A.O. Smith Corp. in a research note on Thursday, October 6th. Jefferies Group lowered their price target on A.O. Smith Corp. from $55.50 to $43.00 and set a “buy” rating for the company in a report on Friday, September 23rd. Finally, BMO Capital Markets set a $53.00 price target on A.O. Smith Corp. and gave the company a “buy” rating in a report on Monday, August 8th. Four investment analysts have rated the stock with a hold rating and eight have issued a buy rating to the stock. The stock presently has an average rating of “Buy” and a consensus target price of $53.79.
Shares of A.O. Smith Corp. (NYSE:AOS) opened at 48.57 on Wednesday. The company has a market cap of $8.45 billion, a price-to-earnings ratio of 26.53 and a beta of 1.40. A.O. Smith Corp. has a 12-month low of $30.15 and a 12-month high of $51.49. The firm has a 50 day moving average price of $47.58 and a 200-day moving average price of $45.51.
A.O. Smith Corp. (NYSE:AOS) last released its earnings results on Wednesday, October 26th. The company reported $0.47 EPS for the quarter, beating analysts’ consensus estimates of $0.45 by $0.02. The firm had revenue of $683.90 million for the quarter, compared to analysts’ expectations of $577.20 million. A.O. Smith Corp. had a return on equity of 21.84% and a net margin of 12.32%. The company’s quarterly revenue was up 9.4% on a year-over-year basis. During the same quarter in the prior year, the firm posted $0.41 earnings per share. On average, equities analysts expect that A.O. Smith Corp. will post $1.83 earnings per share for the current fiscal year.
The business also recently announced a quarterly dividend, which was paid on Tuesday, November 15th. Shareholders of record on Monday, October 31st were issued a dividend of $0.12 per share. The ex-dividend date of this dividend was Thursday, October 27th. This represents a $0.48 dividend on an annualized basis and a yield of 0.99%. A.O. Smith Corp.’s dividend payout ratio is currently 26.30%.
In other news, SVP Charles T. Lauber sold 2,473 shares of the company’s stock in a transaction on Thursday, November 10th. The stock was sold at an average price of $48.12, for a total transaction of $119,000.76. The sale was disclosed in a filing with the SEC, which is available through this hyperlink. Also, VP James F. Stern sold 20,000 shares of the company’s stock in a transaction on Monday, November 14th. The stock was sold at an average price of $47.69, for a total value of $953,800.00. Following the transaction, the vice president now directly owns 85,267 shares in the company, valued at $4,066,383.23. The disclosure for this sale can be found here. Company insiders own 1.76% of the company’s stock.
Several institutional investors have recently modified their holdings of AOS. HighPoint Advisor Group LLC increased its position in shares of A.O. Smith Corp. by 100.0% in the third quarter. HighPoint Advisor Group LLC now owns 9,676 shares of the company’s stock worth $456,000 after buying an additional 4,839 shares during the last quarter. Cornerstone Capital Management Holdings LLC. acquired a new position in shares of A.O. Smith Corp. during the third quarter worth about $630,000. Ameritas Investment Partners Inc. increased its position in shares of A.O. Smith Corp. by 104.3% in the third quarter. Ameritas Investment Partners Inc. now owns 24,040 shares of the company’s stock worth $2,374,000 after buying an additional 12,271 shares during the last quarter. Caisse DE Depot ET Placement DU Quebec acquired a new position in shares of A.O. Smith Corp. during the third quarter worth about $1,413,000. Finally, Dai Ichi Life Holdings Inc. increased its position in shares of A.O. Smith Corp. by 16.2% in the third quarter. Dai Ichi Life Holdings Inc. now owns 45,479 shares of the company’s stock worth $4,493,000 after buying an additional 6,351 shares during the last quarter. 38.10% of the stock is currently owned by institutional investors and hedge funds.
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A.O. Smith Corp. Company Profile
A. O. Smith Corporation operates its business through two segments, which include North America and Rest of World. The Company’s Rest of World segment primarily comprises China, Europe and India. The Rest of World segment supplies water heaters to the residential market in China with a range of product offering, including electric, gas, gas tankless, heat pump and solar units, as well as combi boilers.
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