A. O. Smith Corporation manufactures and markets a range of water heaters, boilers, and other products for residential and commercial end markets in the United States, China, Canada, Europe, and India. The company is based in Milwaukee, Wisconsin.
AOS Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Smith A O Corp. To summarize, we found that Smith A O Corp ranked in the 44th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. The most interesting components of our discounted cash flow analysis for Smith A O Corp ended up being:
The company's debt burden, as measured by earnings divided by interest payments, is 38.18; that's higher than 92.57% of US stocks in the Industrials sector that have positive free cash flow.
The business' balance sheet reveals debt to be 3% of the company's capital (with equity being the remaining amount). Approximately merely 11.81% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
AOS's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 46.81% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
ROLL, PH, PXS, HI, and OESX can be thought of as valuation peers to AOS, in the sense that they are in the Industrials sector and have a similar price forecast based on DCF valuation.
In the 60 or so days since I wrote my cautious piece about A.O. Smith (AOS), the shares are up about 2% against a gain of just over 8% for the S&P 500. This relative underperformance, coupled with the fact that the company has since released financial results, opens the...
Patrick Doyle on Seeking Alpha | September 8, 2020
Shares of A.O. Smith (NYSE:AOS) were unchanged after the company reported Q2 results.Quarterly Results Earnings per share were down 26.23% year over year to $0.45, which beat the estimate of $0.42.Revenue of $663,900,000 declined by 13.26% year over year, which beat the estimate of $661,220,000.Outlook The upcoming fiscal year's EPS expected to be between $1.72 and $1.86.Conference Call Details Date: Jul 30, 2020Time: 10:00 AMView more earnings on AOSET Webcast URL: https://edge.media-server.com/mmc/p/trh8rrwuRecent Stock Performance 52-week high: $53.7252-week low: $33.80Price action over last quarter: Up 22.11%Company Description A.O. Smith Corporation manufactures and markets comprehensive lines of residential and commercial gas, gas tankless, and electric water heaters. Suppleme...