Analysts kept their price target for A. O. Smith broadly steady, with only a small adjustment that reflects fine tuning to inputs such as revenue growth, profit margin, discount rate and future P/E assumptions rather than any major change in their overall view of the shares.
What's in the News
- A. O. Smith is actively assessing acquisitions. Management highlighted available capital for deals that fit its financial criteria and either reinforce the core business or build new growth platforms, according to comments from the Third Quarter 2025 earnings call (Key Developments).
- From July 1, 2025 to September 30, 2025, the company repurchased 1,190,304 shares, or 0.85% of its stock, for $84.07 million, bringing total repurchases under the program announced on December 14, 2007 to 57,730,372 shares, or 35.23%, for $2.94217b (Key Developments).
- The company updated its 2025 earnings guidance, indicating expected net sales in a range of $3.8b to $3.85b and diluted earnings per share between $3.70 and $3.85 (Key Developments).
- On October 13, 2025, the board approved a 6% increase in the quarterly cash dividend to $0.36 per share on both Common Stock and Class A Common Stock, payable on November 17, 2025 to shareholders of record on October 31, 2025 (Key Developments).
Valuation Changes
- Fair Value: The model-based fair value estimate is unchanged at 78.5.
- Discount Rate: The assumed discount rate has risen slightly from 8.35% to 8.39%.
- Revenue Growth: The forecast revenue growth rate has edged down slightly from 3.48% to 3.47%.
- Net Profit Margin: The assumed net profit margin is essentially unchanged, moving from 14.81% to 14.81% on a rounded basis.
- Future P/E: The target future P/E multiple has increased marginally from 19.86x to 19.89x.
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