Stock of the Day

August 20, 2021

A. O. Smith (AOS)

$59.21
-$1.17 (-1.9%)
Market Cap: $8.21B

About A. O. Smith

A. O. Smith Corporation manufactures and markets residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products in North America, China, Europe, and India. The company offers water heaters for residences, restaurants, hotels, office buildings, laundries, car washes, and small businesses; boilers for hospitals, schools, hotels, and other large commercial buildings, as well as homes, apartments, and condominiums; and water treatment products comprising point-of-entry water softeners, well water solutions, and whole-home water filtration products, and point-of-use carbon and reverse osmosis products for residences, restaurants, hotels, and offices. It also provides commercial water treatment and filtration product; expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, and related products and parts; and electric wall-hung, gas tankless, combi-boiler, and heat pump and solar water heaters. The company offers its products under the A. O. Smith, State, Lochinvar, Hague, Water-Right, Master Water, Atlantic Filter, and Water Tec brands. It distributes its products through independent wholesale plumbing distributors, as well as to retail channels consisting of hardware and home center chains, and manufacturer representative firms; and offers Aquasana branded products directly to consumers through e-commerce channels. A. O. Smith Corporation was founded in 1874 and is headquartered in Milwaukee, Wisconsin.

Today's Trend

A. O. Smith Corporation (NYSE: AOS) is seeing mixed analyst signals. The stock has increased despite a recent J.P. Morgan sell rating and several downward revisions to longer-term earnings estimates. The main supportive factor is that some near-term forecasts remain above consensus.

  • Zacks Research raised its Q4 2026 EPS estimate to $0.96 from $0.95 and its FY2026 estimate to $3.79 from $3.76. Both figures exceed the broader full-year consensus of $3.74 and remain within A. O. Smith’s 2026 guidance range of $3.70 to $3.85.
  • Zacks maintained a Hold rating. Its forecasts imply earnings growth beyond the current year, including $4.02 EPS for FY2027 and $4.40 for FY2028, although the estimates were revised during a broader update.
  • J.P. Morgan assigned A. O. Smith a Sell rating, adding a potentially significant source of pressure as investors assess the company’s valuation and growth outlook. A. O. Smith Corporation Gets a Sell from J.P. Morgan
  • Zacks lowered multiple forward estimates, including Q3 2026 EPS to $0.95 from $0.96, Q1 2027 to $0.95 from $0.97, Q2 2027 to $1.07 from $1.08, Q3 2027 to $1.02 from $1.04, and FY2027 to $4.02 from $4.11.
  • The most significant revision was to FY2028 EPS, reduced to $4.40 from $4.59. Q1 2028 and Q2 2028 estimates were also lowered, suggesting analysts see some risk to A. O. Smith’s longer-term earnings momentum.

Overall, the near-term earnings revisions are modestly supportive, but the Sell rating and broad reductions to future forecasts create a bearish overhang. Investors are likely weighing AOS’s current-year earnings resilience against concerns about longer-term growth.

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