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Milwaukee, Wisconsin-based A.O. Smith Corporation (AOS) manufactures residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products. With a market cap of $11.8 billion, A.O. Smith’s operations span various countries in North America, Europe, and Asia. It is expected to announce its Q2 earnings before the market opens on Tuesday, July 23.
Ahead of the event, analysts expect A.O. Smith to report a profit of $1.06 per share, up 5% from $1.01 per share reported in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimates over the past four quarters. Its EPS for the last reported quarter grew 6.4% annually to $1.00, exceeding the consensus estimates by 1%.
Looking ahead to fiscal 2024, analysts expect A.O. Smith to report an EPS of $4.08, up 7.1% from $3.81 in fiscal 2023. Its fiscal 2025 EPS is expected to grow 7.6% annually to $4.39.
AOS stock has rallied 15% over the past 52 weeks, slightly underperforming the S&P 500 Index’s ($SPX) 27.8% gains but outperforming the S&P 500 Industrial Sector SPDR’s (XLI) 13.2% returns during the same time frame.
A.O. Smith faced mixed winds in 2024. Tailwinds included strong sales in North America, driven by commercial water heaters, heat pumps, and lower material costs. India and China also showed solid growth, particularly in water heating and treatment products.
However, shares of the water heating manufacturer fell 4.8% after the release of Q1 earnings results on April 25. The company’s top line failed to meet the Wall Street projections by 1.7%. Moreover, headwinds emerged from flat North American boiler sales, muted year-over-year comparisons, and a weak Chinese economy. Additionally, increased steel costs and softness in direct-to-consumer water treatment sales in North America added to the challenges. Despite these obstacles, A.O. Smith’s diverse product portfolio and strategic market expansions bolstered its overall performance.
The consensus opinion on A.O. Smith stock is neutral, with a “Hold” rating overall. Out of the 12 analysts covering the stock, two recommend a “Strong Buy,” eight advise “Hold,” and the remaining two suggest a “Strong Sell” rating.
The average target price for A.O. Smith is $84.88, indicating a potential upside of 2.3% from the current price levels.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
