Want to see AOS full AI Analyst Report?
Top Page
A. O. Smith Corporation
(NYSE:AOS)
Select Model
Select Model
Rating:69Neutral
Price Target:
$68.00
▲(11.88% Upside)
Action:Reiterated
Date:07/30/26
The score is anchored by generally strong underlying profitability and cash generation, but is held back by a notable TTM revenue decline, higher leverage versus recent years, and uneven cash flow momentum. Valuation is reasonable with a supportive dividend, while technicals are mixed (near-term strength but still below the 200-day trend). The latest earnings call adds modest support via strong North America performance and capital returns, tempered by narrowed guidance, China weakness, and cost-driven margin pressure.
Positive Factors
Strong Profitability and Cash Conversion
High operating and net margins indicate a differentiated, scalable product portfolio, while strong free cash flow conversion supports reinvestment, dividends, debt service and shareholder returns through the next several quarters.
Negative Factors
Top-Line Contraction and Softer Residential Demand
The revenue decline signals weaker current demand and limits operating leverage. Continued softness in the large residential water-heater market could constrain sales growth and delay recovery in earnings momentum.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Profitability and Cash Conversion
High operating and net margins indicate a differentiated, scalable product portfolio, while strong free cash flow conversion supports reinvestment, dividends, debt service and shareholder returns through the next several quarters.
Read all positive factors
A. O. Smith Corporation Key Performance Indicators (KPIs)
Any
Net Sales by Geography
Shows how revenue is split across regions, revealing where growth is coming from and where the company is exposed to local demand cycles, currency swings, or regulatory changes. For A. O. Smith, it highlights dependence on North American water-heating markets versus faster-growing operations in China and other international markets, helping investors judge diversification and top-line risk.
Shows how revenue is split across regions, revealing where growth is coming from and where the company is exposed to local demand cycles, currency swings, or regulatory changes. For A. O. Smith, it highlights dependence on North American water-heating markets versus faster-growing operations in China and other international markets, helping investors judge diversification and top-line risk.
Data provided by:
The Fly
The FlyA. O. Smith Corporation (AOS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.67B
Dividend Yield2.31%
Average Volume (3M)1.76M
Price to Earnings (P/E)17.4
Beta (1Y)0.67
Revenue Growth0.39%
EPS Growth-0.01%
CountryUS
Employees11,500
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)3.59
Shares Outstanding110,047,210
10 Day Avg. Volume1,653,700
30 Day Avg. Volume1,756,999
Financial Highlights & Ratios
PEG Ratio3.01
Price to Book (P/B)5.04
Price to Sales (P/S)2.44
P/FCF Ratio17.14
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$66.14Price Target Upside8.82% Upside
Rating ConsensusHold
Number of Analyst Covering8
EPS Forecast (FY)3.74
Revenue Forecast (FY)$3.89B
A. O. Smith Corporation Business Overview & Revenue Model
Company Description
A. O. Smith Corporation (AOS) is a global manufacturer and marketer specializing in a comprehensive array of water heating and treatment solutions. Its operations span North America, China, Europe, and India, organized into two primary geographic ...
How the Company Makes Money
A. O. Smith makes money primarily by selling water heating and water treatment products and related parts/services through a mix of residential and commercial channels. Its key revenue streams include: (1) Residential water heaters (e.g., gas, ele...
A. O. Smith Corporation Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call conveyed a constructive operational and financial performance in North America—notably strong boiler growth, solid free cash flow (+67% year-to-date), disciplined capital returns (share buyback increased to $300M) and the Leonard Valve acquisition beginning to contribute—while being candid about significant headwinds: pronounced China weakness (‑28% in local currency), margin pressure from elevated steel (≈20% higher in Q2; ~15% expected full-year) and other material and tariff cost inflation which trim near‑term earnings and create a weaker Q3. Management maintained a generally stable full-year outlook but narrowed guidance and signaled strategic actions (China assessment, footprint optimization) to address challenges. Overall the positives around cash generation, North America execution, and capital allocation modestly outweigh the notable geographic and cost pressures, producing a cautiously optimistic tone.Positive Updates
Company-Level Results
Q2 sales approximately $1.0 billion and adjusted EPS of $1.03 for the quarter; updated full-year adjusted EPS guidance narrowed to $3.70–$3.85 (from $3.70–$4.00).
Negative Updates
China Sales Weakness
China sales declined 28% in local currency in Q2; Rest of World segment sales declined 19% to $195 million and segment earnings decreased materially to $10 million (segment margin 5.2%), driven primarily by lower volumes in China.
Read all updates
Q2-2026 Updates
Positive
Negative
Company-Level Results
Q2 sales approximately $1.0 billion and adjusted EPS of $1.03 for the quarter; updated full-year adjusted EPS guidance narrowed to $3.70–$3.85 (from $3.70–$4.00).
Read all positive updates
Company Guidance
The company narrowed its 2026 guidance to full-year sales growth of 2%–3% and adjusted EPS of $3.70–$3.85 (down from a prior sales view of 2%–4% and EPS $3.70–$4.00), while keeping assumptions for China (low double‑digit local‑currency decline), U.S. residential water heaters (down low single digits), U.S. commercial water heaters (flat), North America boilers (6%–8% growth), North America water treatment (5%–6% growth) and ~$70 million of Leonard Valve sales; management warned Q3 EPS will be lower than Q2 and Q4 with the midpoint of the full‑year range assuming Q3 segment margins roughly in line with Q1, steel costs about +15% versus 2025 (with Q3–Q4 cost pressure heavier), water‑heating price increases of ~4%–7% beginning to take effect mid‑Q3, and reiterated strong cash generation (H1 free cash flow $233M, +67% YoY), a raised 2026 buyback target of $300M (up 50%), H1 repurchases of ~$162M (2.6M shares) and a quarterly dividend of $0.36.A. O. Smith Corporation Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
70
Positive
Cash Flow
67
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.80B | 3.83B | 3.82B | 3.85B | 3.75B | 3.54B |
| Gross Profit | 1.47B | 1.49B | 1.46B | 1.48B | 1.33B | 1.31B |
| EBITDA | 734.10M | 792.20M | 786.50M | 823.80M | 310.00M | 707.80M |
| Net Income | 500.30M | 546.20M | 533.60M | 556.60M | 235.70M | 487.10M |
Balance Sheet | ||||||
| Total Assets | 3.64B | 3.14B | 3.24B | 3.21B | 3.33B | 3.47B |
| Cash, Cash Equivalents and Short-Term Investments | 181.30M | 193.20M | 276.10M | 363.40M | 481.80M | 631.40M |
| Total Debt | 676.70M | 192.10M | 216.70M | 155.20M | 366.90M | 219.00M |
| Total Liabilities | 1.80B | 1.28B | 1.36B | 1.37B | 1.58B | 1.64B |
| Stockholders Equity | 1.84B | 1.86B | 1.88B | 1.84B | 1.75B | 1.83B |
Cash Flow | ||||||
| Free Cash Flow | 639.40M | 546.00M | 473.80M | 597.70M | 321.10M | 566.00M |
| Operating Cash Flow | 692.30M | 616.80M | 581.80M | 670.30M | 391.40M | 641.10M |
| Investing Cash Flow | -523.00M | -53.00M | -267.10M | -24.10M | 8.10M | -349.90M |
| Financing Cash Flow | -168.40M | -633.10M | -408.40M | -684.70M | -430.80M | -421.00M |
A. O. Smith Corporation Technical Analysis
Positive
60.78
Price Trends
60.63
Positive
60.58
Positive
64.75
Negative
Market Momentum
0.58
Positive
52.80
Neutral
49.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AOS, the sentiment is Positive. The current price of 60.78 is below the 20-day moving average (MA) of 62.17, above the 50-day MA of 60.63, and below the 200-day MA of 64.75, indicating a neutral trend. The MACD of 0.58 indicates Positive momentum. The RSI at 52.80 is Neutral, neither overbought nor oversold. The STOCH value of 49.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AOS.
A. O. Smith Corporation Risk Analysis
A. O. Smith Corporation disclosed 20 risk factors in its most recent earnings report. A. O. Smith Corporation reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
A. O. Smith Corporation Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $12.51B | 32.28 | 18.56% | 0.63% | 17.13% | 23.21% | |
72 Outperform | $9.90B | 27.12 | 16.63% | 1.19% | -0.26% | 29.38% | |
69 Neutral | $8.67B | 17.39 | 26.96% | 2.34% | 0.39% | -0.01% | |
69 Neutral | $10.41B | 36.32 | 12.37% | ― | 20.63% | 27.00% | |
64 Neutral | $10.47B | 15.91 | 17.13% | 1.69% | -2.15% | 8.39% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $12.44B | 46.88 | 9.54% | ― | 0.61% | -27.77% |
* Industrials Sector Average
AOS
A. O. Smith Corporation
62.43
-7.76
-11.05%
FLS
Flowserve
78.10
26.78
52.19%
GNRC
Generac Holdings
206.75
16.20
8.50%
PNR
Pentair
63.78
-39.40
-38.18%
SPXC
SPX
204.48
18.20
9.77%
WTS
Watts Water Technologies
369.90
100.69
37.40%
A. O. Smith Corporation Corporate Events
Business Operations and StrategyExecutive/Board Changes
A. O. Smith Names CEO Stephen Shafer as Chairman
Positive
Jun 22, 2026
On June 22, 2026, A. O. Smith announced that Executive Chairman Kevin J. Wheeler will retire from that role effective July 1, 2026, while remaining on the board of directors. The move marks the transition of long‑time leader Wheeler, whose t...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.