These are top 10 stocks traded on the Robinhood UK platform in July
On Monday, Stifel analysts maintained a Buy rating with a $78.00 price target for AO Smith Corp (NYSE:AOS), a manufacturer of residential and commercial water heating equipment. The company, currently trading at a P/E ratio of 19x with a market capitalization of $9.7 billion, appears slightly undervalued according to InvestingPro analysis. The decision follows the release of recent data from the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) indicating an uptick in U.S. heating and cooling equipment shipments for March.
According to the AHRI data, the total shipments of residential water heaters, including both gas and electric models, saw a monthly increase of 14.4% and a yearly rise of 6.2%. Meanwhile, commercial water heater shipments also grew by 13.9% month-over-month, though they experienced a slight year-over-year decline of 1.1%. With a strong gross profit margin of 38% and healthy return on equity of 28%, AO Smith maintains a solid financial position in the industry.
The aggregate shipments of residential and commercial water heaters for March demonstrated significant growth, with a 14.4% increase month-over-month and a 6.0% rise year-over-year on a unit basis. When adjusted for inflation, the total revenue for these shipments is estimated to have grown by 14.1% month-over-month and by 5.5% year-over-year.
The positive shipment data reflects a robust demand for AO Smith’s products in the heating and cooling market. The company is known for its wide range of water heaters and boilers, which are essential components for both residential and commercial settings.
The maintained Buy rating and price target by Stifel signify confidence in AO Smith’s market position and its ability to capitalize on the growing demand for heating and cooling equipment. The company’s consistent performance, as illustrated by the shipment data, supports the analyst’s outlook for AO Smith’s continued success in the sector. Notable is the company’s 16-year streak of dividend increases and strong financial health, as highlighted by InvestingPro, which offers comprehensive analysis and additional insights through its detailed Pro Research Report, available for over 1,400 US stocks.
In other recent news, A.O. Smith has reported its first-quarter 2025 earnings, exceeding analysts’ expectations with an earnings per share (EPS) of $0.95, compared to the forecasted $0.91. The company’s revenue also surpassed projections, reaching $963.9 million against an anticipated $953.2 million. Despite a 2% year-over-year decline in North American sales, A.O. Smith continues to navigate a challenging macroeconomic environment, particularly in China, where consumer confidence remains low. Stifel analysts have raised their price target for A.O. Smith shares to $78, maintaining a Buy rating, citing the company’s proactive strategies to manage increased costs due to tariffs. The firm highlights A.O. Smith’s efforts in repricing and strategic sourcing to mitigate these expenses. Additionally, the company has implemented measures to balance North American production, restricting customer orders to prevent excessive pre-buying. A.O. Smith has set a full-year 2025 EPS guidance range of $3.60 to $3.90, anticipating operating margin expansion and projecting a decline in China sales due to ongoing challenges.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.