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Why Has A.O. Smith Stock Rallied And What To Expect From The Company?

A.O. Smith (NYSE: AOS), a maker of water heaters and boilers, saw its stock price rally by close to 15% over the last month. While the stock has seen significant volatility this year, on account of the headwinds in the Chinese business and higher steel prices, there have been some positive trends in recent months. Firstly, the company’s Q3 results were largely in-line with expectations, as it benefited from a reasonably strong performance in North America, where sales were up 6%, driven by demand for commercial water heaters and boilers, with margins also trending higher. Separately, the company has increased its share repurchases and dividend this year and this is likely a positive sign for investors.

Why Is A.O. Smith Stock Up 15% Over The Last Month, And What’s The Outlook? The context for the last few years: A closer look At A.O. Smith’s Total Revenues over the last few years and the outlook

 

Total Revenues for A.O. Smith moderately increased from $3.00 Bil in 2017 to $3.19 Bil in 2018; an increase of 6.38%.

This compares with Total Revenues growth of:

7.66% in 2015
5.89% in 2016
11.6% in 2017

We expect Total Revenues growth to be -5.5% in 2019.

A closer look At A.O. Smith’s Total Expenses over the last few years and the outlook

Total Expense for A.O. Smith moderately increased from $2.48 Bil in 2017 to $2.63 Bil in 2018; an increase of 6.23%.

This compares with Total Expense growth of:

  • 3.13% in 2015
  • 4.19% in 2016
  • 11.4% in 2017

We expect Total Expense growth to be -4% in 2019.

How has A.O. Smith’s EBT trended?

EBT for A.O. Smith increased moderately by 7.10% from $521 Mil in 2017 to $558 Mil in 2018. We expect EBT to decline to $487 Mil in 2019.

How has A.O. Smith’s Net Income and EPS trended?

For more details on A.O. Smith’s Net Income and EPS, view our interactive dashboard analysis.

 

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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