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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 $12.2 billion, A.O. Smith’s operations span various countries in North America, Europe, and Asia.
Companies worth $10 billion or more are generally described as "large-cap stocks," A.O. Smith fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the specialty industrial machinery industry.
A.O. Smith touched its all-time high of $92.44 on Jul. 18 and is now trading 10.1% below that peak. AOS has experienced a marginal decline over the past three months, lagging behind the Dow Jones Industrials Average’s ($DOWI) 7.6% gains during the same time frame.
Over the longer term, AOS gained 1.9% in 2024, underperforming DOWI’s 11.8% gains during the same time frame. However, over the past 52 weeks, AOS is up 30.2%, outperforming DOWI’s 24% returns during the same time frame.
To confirm the overall bullish trend and the recent downturn, AOS has predominantly traded above its 200-day moving average over the past year. However, in early August, its prices fell below this key level, and it has been trading below its 50-day moving average since late April.
Shares of A.O. Smith plunged 9.4% after the release of its Q2 earnings on Jul. 23. The company reported a robust 6.6% year-over-year growth in net sales, reaching $1 billion, exceeding Wall Street expectations. Its sales in the North America segment rose 9% to $790.7 million, driven by higher volumes of water heaters and commercial boilers, along with effective pricing actions. Meanwhile, its sales in India surged by 16% in local currency due to strong demand. Although it reported a 5% year-over-year growth in adjusted EPS, reaching $1.06, it slightly missed the consensus estimate of $1.07.
Despite the initial dip in prices, the AOS stock rebounded quickly and remained in the green for the next three trading sessions.
A.O. Smith’s competitor, Ingersoll Rand Inc. (IR), gained 51.2% over the past year and 26.1% in 2024, outperforming AOS.
Among the 12 analysts covering the AOS stock, the consensus rating is a “Hold.” The mean price target of $87.62 represents a potential upside of 4.3% from current price levels.
On the date of publication, Aditya Sarawgi 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.
