A.O. Smith Corp. (NYSE:AOS) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a report released on Tuesday.

According to Zacks, “Year to date, A.O. Smith’s shares have recorded an average return of 27.2%, better than the Zacks categorized Machinery Electric average of 22.7%. Encouragingly, the company has an excellent earnings surprise history, beating estimates each time in the trailing four quarters. A.O. Smith’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. Also, acquisition of residential water treatment firm, Aquasana, looks promising. 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 equities analysts also recently weighed in on AOS. BMO Capital Markets set a $53.00 target price on shares of A.O. Smith Corp. and gave the stock a “buy” rating in a research note on Monday, August 8th. Jefferies Group lowered their target price on shares of A.O. Smith Corp. from $55.50 to $43.00 and set a “buy” rating for the company in a research note on Friday, September 23rd. Finally, KeyCorp reissued 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. Four research analysts have rated the stock with a hold rating and eight have assigned a buy rating to the company’s stock. A.O. Smith Corp. has an average rating of “Buy” and a consensus target price of $54.14.

Analyst Recommendations for A.O. Smith Corp. (NYSE:AOS)

Shares of A.O. Smith Corp. (NYSE:AOS) opened at 48.63 on Tuesday. The company has a market capitalization of $8.46 billion, a PE ratio of 26.56 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’s 50-day moving average is $47.36 and its 200 day moving average is $45.81.

A.O. Smith Corp. (NYSE:AOS) last announced its earnings results on Wednesday, October 26th. The company reported $0.47 earnings per share for the quarter, topping analysts’ consensus estimates of $0.45 by $0.02. A.O. Smith Corp. had a net margin of 12.32% and a return on equity of 21.84%. The business earned $683.90 million during the quarter, compared to the consensus estimate of $577.20 million. During the same quarter last year, the firm earned $0.41 earnings per share. A.O. Smith Corp.’s quarterly revenue was up 9.4% on a year-over-year basis. Equities research analysts predict that A.O. Smith Corp. will post $1.83 EPS for the current year.

The firm also recently disclosed a quarterly dividend, which was paid on Tuesday, November 15th. Stockholders of record on Monday, October 31st were issued a dividend of $0.12 per share. This represents a $0.48 dividend on an annualized basis and a dividend yield of 0.99%. The ex-dividend date of this dividend was Thursday, October 27th. A.O. Smith Corp.’s dividend payout ratio is currently 26.30%.

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In other news, VP James F. Stern sold 20,000 shares of A.O. Smith Corp. stock in a transaction dated Monday, November 14th. The shares were sold at an average price of $47.69, for a total transaction of $953,800.00. Following the completion of the transaction, the vice president now directly owns 85,267 shares in the company, valued at $4,066,383.23. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, SVP Charles T. Lauber sold 2,473 shares of A.O. Smith Corp. stock in a transaction dated Thursday, November 10th. The shares were sold at an average price of $48.12, for a total transaction of $119,000.76. The disclosure for this sale can be found here. Insiders own 1.76% of the company’s stock.

Several hedge funds and other institutional investors have recently modified their holdings of AOS. Synovus Financial Corp boosted its position in shares of A.O. Smith Corp. by 0.3% in the second quarter. Synovus Financial Corp now owns 3,650 shares of the company’s stock worth $320,000 after buying an additional 12 shares in the last quarter. M&T Bank Corp raised its position in A.O. Smith Corp. by 0.5% in the third quarter. M&T Bank Corp now owns 3,870 shares of the company’s stock worth $382,000 after buying an additional 21 shares during the last quarter. Commonwealth Equity Services Inc raised its position in A.O. Smith Corp. by 0.3% in the third quarter. Commonwealth Equity Services Inc now owns 12,352 shares of the company’s stock worth $1,220,000 after buying an additional 37 shares during the last quarter. Cue Financial Group Inc. raised its position in A.O. Smith Corp. by 0.3% in the second quarter. Cue Financial Group Inc. now owns 12,270 shares of the company’s stock worth $1,081,000 after buying an additional 40 shares during the last quarter. Finally, First Citizens Bank & Trust Co. raised its position in A.O. Smith Corp. by 1.0% in the second quarter. First Citizens Bank & Trust Co. now owns 5,693 shares of the company’s stock worth $502,000 after buying an additional 56 shares during the last quarter. Hedge funds and other institutional investors own 37.60% of the company’s stock.

About A.O. Smith Corp.

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.

5 Day Chart for NYSE:AOS

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