Zacks Investment Research downgraded shares of A.O. Smith Corp. (NYSE:AOS) from a buy rating to a hold rating in a report issued on Wednesday morning.
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.”
Several other equities research analysts have also weighed in on the company. Jefferies Group dropped their target price on A.O. Smith Corp. from $55.50 to $43.00 and set a buy rating on the stock in a research report on Friday, September 23rd. KeyCorp reaffirmed a buy rating and issued a $107.00 target price on shares of A.O. Smith Corp. in a research report on Thursday, October 6th. Finally, BMO Capital Markets set a $53.00 target price on A.O. Smith Corp. and gave the stock a buy rating in a research report on Monday, August 8th. Three research analysts have rated the stock with a hold rating and nine have given a buy rating to the stock. The stock currently has a consensus rating of Buy and a consensus price target of $54.14.
A.O. Smith Corp. (NYSE:AOS) opened at 48.71 on Wednesday. The firm has a market cap of $8.47 billion, a P/E ratio of 26.60 and a beta of 1.40. A.O. Smith Corp. has a 1-year low of $30.15 and a 1-year high of $51.49. The stock’s 50 day moving average price is $47.39 and its 200 day moving average price is $45.74.
A.O. Smith Corp. (NYSE:AOS) last issued its earnings results on Wednesday, October 26th. The company reported $0.47 earnings per share for the quarter, topping the Thomson Reuters’ consensus estimate of $0.45 by $0.02. A.O. Smith Corp. had a return on equity of 21.84% and a net margin of 12.32%. The firm had revenue of $683.90 million for the quarter, compared to analyst estimates of $577.20 million. During the same period last year, the company earned $0.41 earnings per share. The firm’s revenue for the quarter 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 company also recently announced 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. The ex-dividend date of this dividend was Thursday, October 27th. This represents a $0.48 annualized dividend and a yield of 0.98%. A.O. Smith Corp.’s dividend payout ratio is currently 26.30%.
In related news, SVP Charles T. Lauber sold 2,473 shares of the firm’s stock in a transaction dated 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 legal filing with the Securities & Exchange Commission, which is accessible through this link. Also, VP James F. Stern sold 20,000 shares of the firm’s stock in a transaction dated Monday, November 14th. The shares were 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 of the company’s stock, valued at approximately $4,066,383.23. 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 made changes to their positions in AOS. OLD Mutual Customised Solutions Proprietary Ltd. purchased a new position in shares of A.O. Smith Corp. during the second quarter valued at $106,000. Nordea Investment Management AB bought a new position in A.O. Smith Corp. during the second quarter worth $150,000. Daiwa Securities Group Inc. bought a new position in A.O. Smith Corp. during the second quarter worth $150,000. Mn Services Vermogensbeheer B.V. bought a new position in A.O. Smith Corp. during the second quarter worth $150,000. Finally, Advisor Partners LLC bought a new position in A.O. Smith Corp. during the third quarter worth $205,000. 37.60% of the stock is owned by institutional investors and hedge funds.
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.