A. O. Smith (AOS) Downgraded to “Hold” at Zacks Investment Research
Zacks Investment Research downgraded shares of A. O. Smith (NYSE:AOS) from a buy rating to a hold rating in a report published on Wednesday.
According to Zacks, “A flourishing water heater industry in the United States, driven by new construction and expansion of replacement demand, and robust consumer product demand in China are likely to drive A.O. Smith's top-line growth, going forward. In second-quarter 2018, the company's earnings and sales surpassed respective estimates by 6.5% and 3.2%. For 2018, the company raised its earnings per share guidance to $2.59-$2.63 range. Also, the company is progressing well with the launch of its water treatment products at all Lowe's home improvement stores in the United States. However, rising expenses in China is creating pressure on the company's margins. Also, increasing steel costs and unfavourable movements in foreign currencies are concerning. Over the past year, the company's stock has underperformed the industry.”
Other equities research analysts also recently issued reports about the company. DA Davidson boosted their target price on A. O. Smith from $72.00 to $73.00 and gave the stock a buy rating in a report on Thursday, April 26th. ValuEngine raised A. O. Smith from a hold rating to a buy rating in a report on Friday, May 11th. Boenning Scattergood reissued a buy rating and issued a $75.00 target price on shares of A. O. Smith in a report on Wednesday, July 25th. SunTrust Banks reissued a buy rating and issued a $71.00 target price on shares of A. O. Smith in a report on Thursday, July 26th. Finally, BMO Capital Markets reissued a buy rating and issued a $73.00 target price on shares of A. O. Smith in a report on Thursday, July 26th. Five analysts have rated the stock with a hold rating and six have issued a buy rating to the company’s stock. The stock currently has a consensus rating of Buy and an average target price of $70.71.
A. O. Smith (NYSE:AOS) last released its earnings results on Wednesday, July 25th. The industrial products company reported $0.66 EPS for the quarter, topping the Thomson Reuters’ consensus estimate of $0.62 by $0.04. A. O. Smith had a return on equity of 24.67% and a net margin of 10.50%. The business had revenue of $833.30 million for the quarter, compared to the consensus estimate of $811.72 million. During the same period in the previous year, the company posted $0.53 earnings per share. The company’s revenue for the quarter was up 12.9% compared to the same quarter last year. research analysts predict that A. O. Smith will post 2.61 EPS for the current fiscal year.
The firm also recently declared a quarterly dividend, which will be paid on Wednesday, August 15th. Stockholders of record on Tuesday, July 31st will be paid a $0.18 dividend. This represents a $0.72 annualized dividend and a dividend yield of 1.25%. The ex-dividend date is Monday, July 30th. A. O. Smith’s dividend payout ratio is currently 33.18%.
In other news, insider John J. Kita sold 9,000 shares of the business’s stock in a transaction on Friday, June 8th. The stock was sold at an average price of $64.61, for a total value of $581,490.00. Following the completion of the transaction, the insider now owns 41,917 shares in the company, valued at $2,708,257.37. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, Chairman Ajita G. Rajendra sold 2,600 shares of the business’s stock in a transaction on Tuesday, May 29th. The stock was sold at an average price of $64.60, for a total value of $167,960.00. Following the completion of the transaction, the chairman now owns 301,018 shares of the company’s stock, valued at approximately $19,445,762.80. The disclosure for this sale can be found here. Insiders sold 31,481 shares of company stock valued at $2,013,788 in the last 90 days. Company insiders own 1.28% of the company’s stock.
Hedge funds have recently bought and sold shares of the company. Alps Advisors Inc. purchased a new position in shares of A. O. Smith in the second quarter worth $565,000. M&T Bank Corp raised its stake in shares of A. O. Smith by 19.1% in the first quarter. M&T Bank Corp now owns 10,381 shares of the industrial products company’s stock worth $660,000 after purchasing an additional 1,667 shares during the last quarter. Schwab Charles Investment Management Inc. raised its stake in shares of A. O. Smith by 5.4% in the first quarter. Schwab Charles Investment Management Inc. now owns 852,406 shares of the industrial products company’s stock worth $54,205,000 after purchasing an additional 43,915 shares during the last quarter. BlackRock Inc. increased its position in A. O. Smith by 2.0% during the first quarter. BlackRock Inc. now owns 10,100,010 shares of the industrial products company’s stock valued at $642,259,000 after acquiring an additional 196,941 shares during the last quarter. Finally, Brinker Capital Inc. increased its position in A. O. Smith by 204.6% during the first quarter. Brinker Capital Inc. now owns 45,912 shares of the industrial products company’s stock valued at $2,920,000 after acquiring an additional 30,838 shares during the last quarter. Hedge funds and other institutional investors own 75.18% of the company’s stock.
About A. O. Smith
A. O. Smith Corporation manufactures and markets residential and commercial gas and electric water heaters, boilers, and water treatment products in North America, China, Europe, and India. The company offers water heaters for residences, restaurants, hotels and motels, office buildings, laundries, car washes, and small businesses; residential and commercial boilers for use in space heating applications for hospitals, schools, hotels, and other large commercial buildings; and water treatment products, including on-the-go filtration bottles, point-of-use carbon and reverse osmosis products, point-of-entry water softeners, and whole-home water filtrations products for residences, restaurants, hotels, and offices.
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