Zacks Investment Research upgraded
AO Smith Corp.
) to a Zacks Rank #1 (Strong Buy) on Apr 9, 2013.
Why the Upgrade?
ABB LTD-ADR (ABB): Free Stock Analysis Report
SMITH (AO) CORP (AOS): Free Stock Analysis
CAPSTONE TURBIN (CPST): Free Stock Analysis
EMERSON ELEC CO (EMR): Free Stock Analysis
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AO Smith has been performing well in the last few quarters and
its solid financial health has raised optimism for a better
future ahead. The industrial electrical equipment maker in its
last reported quarter posted earnings per share from continuing
operation of 91 cents that far exceeded the Zacks Consensus
Estimate of 81 cents.
Revenue in the fourth quarter grew 10.2% year over year as sales
from North American operations increased 6.2% while revenue from
Rest of the World increased by 21.4%. Expenses also grew and
offset partially the higher revenue generation in the quarter.
Operating margin came in at 11.7% as against 9.9% in the year-ago
Management of AO Smith provided an encouraging outlook for 2013.
Business, especially replacement water heater business, in North
America is expected to flourish. Housing market recovery is
likely to boost sales in U.S. and expansion in global markets to
add to the growth momentum.
AO Smith reported upbeat results in its trailing four quarters
having an average positive earnings surprise of 9.2%. Outlook
remains bright for the company and, hence, we have an Earnings
Zacks Earnings ESP: A Better Method
) of +5.3% for 2013 and +2.7% for 2014.
Also, the earnings estimate for AO Smith has increased by 0.5% to
$4.03 for 2014 while it has plummeted by the same magnitude to
$3.39 for 2013.
Other Stocks to Consider
AO Smith Corp. is a $3.2 billion company. Other stocks to watch
out for in the industry are
Capstone Turbine Corp.
Emerson Electric Co.
), each holding a Zacks Rank #2 (Buy).