A. O. Smith Corporation, the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Susan Maklari from Goldman Sachs maintained a Sell rating on the stock and has a $65.00 price target.
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Susan Maklari’s rating is based on several factors influencing A. O. Smith Corporation’s financial outlook. The company is expected to face increased volatility in its near-term results, particularly due to rising steel costs, which are projected to increase by 15-20% in the second half of the year. This, combined with a modest underperformance in water heater volumes, is likely to exert pressure on North America’s operating margins. Additionally, while there is a potential strategic shift following a recent CEO succession, the details of these initiatives remain unclear, leaving uncertainty about their impact on the company’s future performance.
Despite some optimism about potential operational improvements and portfolio management strategies, the current operating environment poses significant challenges. The company’s guidance for flat industry volumes and the impact of recent price increases add to the cautious outlook. Given these factors, along with a projected flat EPS for 2025 compared to previous years, Susan Maklari maintains a Sell rating on A. O. Smith Corporation’s stock.
Maklari covers the Consumer Cyclical sector, focusing on stocks such as Somnigroup International, Toll Brothers, and Installed Building Products. According to TipRanks, Maklari has an average return of 0.8% and a 50.45% success rate on recommended stocks.