Zacks Investment Research upgraded shares of A.O. Smith Corp. (NYSE:AOS) from a hold rating to a buy rating in a research report sent to investors on Monday. Zacks Investment Research currently has $55.00 target price on the stock.
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. Sales of residential and commercial boilers are largely driven by innovation by Lochinvar. Going forward in 2016, the company projects growth rate of 8% for total Lochinvar-branded products. Also, the recent acquisition of residential water treatment firm – Aquasana – is expected to fortify the geographic footprint. The company expects its China operations to maintain momentum and experience about 15% growth rate in local currency in 2016. However, foreign currency fluctuations, escalating SG&A & other corporate expenses and higher steel prices are likely to act as significant headwinds in the forthcoming quarters.”
Several other brokerages also recently issued reports on AOS. KeyCorp reissued a buy rating and set a $107.00 price target on shares of A.O. Smith Corp. in a report on Thursday, October 6th. Jefferies Group cut their price target on shares of 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 target price on shares of A.O. Smith Corp. and gave the stock a buy rating in a research note on Monday, August 8th. Three investment analysts have rated the stock with a hold rating and nine have issued a buy rating to the stock. The company currently has an average rating of Buy and a consensus target price of $54.14.
Shares of A.O. Smith Corp. (NYSE:AOS) opened at 48.71 on Monday. A.O. Smith Corp. has a one year low of $30.15 and a one year high of $51.49. The company has a market capitalization of $8.47 billion, a PE ratio of 26.60 and a beta of 1.40. The company’s 50-day moving average is $47.39 and its 200-day moving average is $45.74.
A.O. Smith Corp. (NYSE:AOS) last announced its quarterly earnings results on Wednesday, October 26th. The company reported $0.47 earnings per share (EPS) for the quarter, beating the consensus estimate 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 firm earned $683.90 million during the quarter, compared to the consensus estimate of $577.20 million. During the same period last year, the firm posted $0.41 EPS. The firm’s quarterly revenue was up 9.4% on a year-over-year basis. Equities analysts predict that A.O. Smith Corp. will post $1.83 earnings per share for the current year.
The firm also recently declared a quarterly dividend, which was paid on Tuesday, November 15th. Investors of record on Monday, October 31st were paid a dividend of $0.12 per share. This represents a $0.48 dividend on an annualized basis and a dividend yield of 0.98%. The ex-dividend date of this dividend was Thursday, October 27th. A.O. Smith Corp.’s dividend payout ratio (DPR) is 26.30%.
In related news, VP James F. Stern sold 20,000 shares of the business’s stock in a transaction that occurred on 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 owns 85,267 shares in the company, valued at $4,066,383.23. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, SVP Charles T. Lauber sold 2,473 shares of the business’s stock in a transaction that occurred on 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. Corporate insiders own 1.76% of the company’s stock.
A number of hedge funds and other institutional investors have recently modified their holdings of AOS. Metropolitan Life Insurance Co. NY boosted its position in shares of A.O. Smith Corp. by 2.5% in the first quarter. Metropolitan Life Insurance Co. NY now owns 71,069 shares of the company’s stock worth $5,423,000 after buying an additional 1,733 shares in the last quarter. Arizona State Retirement System boosted its position in shares of A.O. Smith Corp. by 5.4% in the first quarter. Arizona State Retirement System now owns 40,943 shares of the company’s stock worth $3,124,000 after buying an additional 2,100 shares in the last quarter. Squarepoint Ops LLC purchased a new position in shares of A.O. Smith Corp. during the first quarter worth about $1,065,000. Ladenburg Thalmann Financial Services Inc. boosted its position in shares of A.O. Smith Corp. by 4.9% in the first quarter. Ladenburg Thalmann Financial Services Inc. now owns 25,798 shares of the company’s stock worth $1,969,000 after buying an additional 1,194 shares in the last quarter. Finally, BlueMountain Capital Management LLC boosted its position in shares of A.O. Smith Corp. by 410.2% in the first quarter. BlueMountain Capital Management LLC now owns 7,928 shares of the company’s stock worth $605,000 after buying an additional 6,374 shares in 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.