A. O. Smith (AOS) benefits from its leadership in the replacement-driven water heater market, mix-accretive boiler growth, and expansion into water treatment and these dynamics are expected to continue driving core growth and margins, Oppenheimer said in a note on Tuesday.
The company's region-specific manufacturing model largely mitigates tariff risk and may prove to be a competitive advantage if 25% Mexico tariffs are imposed, according to the note.
The firm said that energy-efficiency regulations serve as growth catalysts for A. O. Smith and 2026 requirements for high-efficiency commercial water heaters and proposed 2029 residential standards for heat pumps, are expected to create significant medium-term opportunities for the company.
"We also believe North American franchise value exceeds consolidated enterprise value -- in turn offering needle-moving upside potential on A. O. Smith-China recovery and the secular runway of A. O. Smith-India," the firm added.
Oppenheimer upgraded its rating on A. O. Smith's stock to outperform from perform with a price target of $88.
Price: 70.64, Change: +2.01, Percent Change: +2.93
免责声明：投资有风险，本文并非投资建议，以上内容不应被视为任何金融产品的购买或出售要约、建议或邀请，作者或其他用户的任何相关讨论、评论或帖子也不应被视为此类内容。本文仅供一般参考，不考虑您的个人投资目标、财务状况或需求。TTM对信息的准确性和完整性不承担任何责任或保证，投资者应自行研究并在投资前寻求专业建议。