A. O. Smith Corporation [AOS] Stock trading around $53.38 per share: What’s Next?

A. O. Smith Corporation [NYSE: AOS] gained 3.73% or 1.92 points to close at $53.38 with a heavy trading volume of 1686894 shares. The company report on October 29, 2020 that A. O. Smith reports third quarter earnings of $0.65 per share and upgrades full year 2020 earnings guidance.

Global water technology company A. O. Smith Corporation (the “Company”) (NYSE-AOS) today announced third quarter net earnings of $105.4 million or $0.65 per share, on third quarter sales of $760.0 million. Sales were four percent higher than sales of $728.2 million reported in the same quarter of 2019. Net earnings in 2019 were $87.3 million or $0.53 per share.

Adjusted earnings of $106.7 million, or $0.66 per share, were approximately 22 percent higher than the third quarter of 2019 and excluded $1.3 million, or $0.01 per share, of after-tax severance and restructuring charges in the current quarter related to aligning the business to current market conditions.

It opened the trading session at $53.01, the shares rose to $55.00 and dropped to $52.34, the range by which the price of stock traded the whole day. The daily chart for AOS points out that the company has recorded 28.16% gains over the past six months. However, it is still -57.88% lower than its most recent low trading price.

If we look at the average trading volume of 1.10M shares, AOS reached to a volume of 1686894 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Here is what top equities market gurus are saying about A. O. Smith Corporation [AOS]:

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for AOS shares is $55.13 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on AOS stock is a recommendation set at 2.50. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

Citigroup have made an estimate for A. O. Smith Corporation shares, keeping their opinion on the stock as Neutral, with their previous recommendation back on October 23, 2020. While these analysts kept the previous recommendation, UBS raised their target price from $54 to $60. The new note on the price target was released on October 13, 2020, representing the official price target for A. O. Smith Corporation stock. Previously, the target price had yet another raise from $47 to $62, while Rosenblatt kept a Buy rating on AOS stock.

The Average True Range (ATR) for A. O. Smith Corporation is set at 1.46, with the Price to Sales ratio for AOS stock in the period of the last 12 months amounting to 3.10. The Price to Book ratio for the last quarter was 5.19, with the Price to Cash per share for the same quarter was set at 3.52. Price to Free Cash Flow for AOS in the course of the last twelve months was 30.10 with Quick ratio for the last quarter at 1.50.

Trading performance analysis for AOS stock

A. O. Smith Corporation [AOS] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -2.79. With this latest performance, AOS shares gained by 1.10% in over the last four-week period, additionally plugging by 28.16% over the last 6 months – not to mention a rise of 5.95% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for AOS stock in for the last two-week period is set at 48.68, with the RSI for the last a single of trading hit 45.18, and the three-weeks RSI is set at 50.56 for A. O. Smith Corporation [AOS]. The present Moving Average for the last 50 days of trading for this stock 52.26, while it was recorded at 53.35 for the last single week of trading, and 46.32 for the last 200 days.

A. O. Smith Corporation [AOS]: A deeper dive into fundamental analysis

Operating Margin for any stock indicates how profitable investing would be, and A. O. Smith Corporation [AOS] shares currently have an operating margin of +15.60 and a Gross Margin at +39.51. A. O. Smith Corporation’s Net Margin is presently recorded at +12.36.

Return on Total Capital for AOS is now 23.70, given the latest momentum, and Return on Invested Capital for the company is 18.87. Return on Equity for this stock inclined to 21.87, with Return on Assets sitting at 12.07. When it comes to the capital structure of this company, A. O. Smith Corporation [AOS] has a Total Debt to Total Equity ratio set at 20.08. Additionally, AOS Total Debt to Total Capital is recorded at 16.72, with Total Debt to Total Assets ending up at 10.95. Long-Term Debt to Equity for the company is recorded at 18.95, with the Long-Term Debt to Total Capital now at 15.78.

Reflecting on the efficiency of the workforce at the company, A. O. Smith Corporation [AOS] managed to generate an average of $24,503 per employee. Receivables Turnover for the company is 4.84 with a Total Asset Turnover recorded at a value of 0.98.A. O. Smith Corporation’s liquidity data is similarly interesting compelling, with a Quick Ratio of 1.50 and a Current Ratio set at 2.00.

A. O. Smith Corporation [AOS]: An earnings per share (EPS) analysis

With the latest financial reports released by the company, A. O. Smith Corporation posted 0.53/share EPS, while the average EPS was predicted by analysts to be reported at 0.53/share. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for AOS. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for A. O. Smith Corporation go to 8.00%.

An analysis of insider ownership at A. O. Smith Corporation [AOS]

There are presently around $6,844 million, in the hands of institutional investors. The top three institutional holders of AOS stocks are: VANGUARD GROUP INC with ownership of 15,415,898, which is approximately -5.164% of the company’s market cap and around 0.30% of the total institutional ownership; BLACKROCK INC., holding 11,944,391 shares of the stock with an approximate value of $637.59 million in AOS stocks shares; and STATE STREET CORP, currently with $482.26 million in AOS stock with ownership of nearly -7.185% of the company’s market capitalization.

Positions in A. O. Smith Corporation stocks held by institutional investors increased at the end of October and at the time of the October reporting period, where 233 institutional holders increased their position in A. O. Smith Corporation [NYSE:AOS] by around 10,892,192 shares. Additionally, 235 investors decreased positions by around 14,147,477 shares, while 52 investors held positions by with 103,165,378 shares. The mentioned changes placed institutional holdings at 128,205,047 shares, according to the latest SEC report filing. AOS stock had 88 new institutional investments in for a total of 2,069,237 shares, while 45 institutional investors sold positions of 1,936,865 shares during the same period.

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