A. O. Smith (NYSE:AOS) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a note issued to investors on Tuesday.

According to Zacks, “Over the past six months, A.O. Smith’s stock has outperformed the industry average. A flourishing water heater industry, robust consumer product demand in China and positive industry trends are likely to drive top-line growth, going forward. However, on the flip side, appreciation in steel prices is expected to put margins under pressure. Devaluation of the Chinese currency and rising selling and administrative expenses are expected to act as headwinds, going forward. Moreover, transition of the Chinese economy to a consumer driven one has resulted in a significant slowdown that might impact the company’s sales in the region.  Also, strong competition in the water boilers and heaters industry compounds the company’s challenges. This apart, costs related to ERP implementation and expansion pose as major threats for the company’s profitability.”

Other analysts have also issued research reports about the company. KeyCorp reaffirmed a “hold” rating on shares of A. O. Smith in a research note on Tuesday, September 12th. Robert W. Baird reaffirmed a “buy” rating and issued a $64.00 price target on shares of A. O. Smith in a research note on Wednesday, October 4th. Stifel Nicolaus reaffirmed a “hold” rating and issued a $61.00 price target on shares of A. O. Smith in a research note on Thursday, October 26th. SunTrust Banks reaffirmed a “buy” rating and issued a $65.00 price target on shares of A. O. Smith in a research note on Thursday, October 12th. Finally, BMO Capital Markets reiterated a “buy” rating and issued a $60.00 price objective on shares of A. O. Smith in a research report on Wednesday, September 6th. One equities research analyst has rated the stock with a sell rating, four have given a hold rating and four have assigned a buy rating to the stock. The stock currently has a consensus rating of “Hold” and an average price target of $62.40.

Shares of A. O. Smith (AOS) traded down $0.45 during trading hours on Tuesday, hitting $61.26. The stock had a trading volume of 572,200 shares, compared to its average volume of 988,424. A. O. Smith has a one year low of $46.44 and a one year high of $63.70. The firm has a market cap of $10,570.00, a price-to-earnings ratio of 30.03, a PEG ratio of 2.30 and a beta of 1.57. The company has a debt-to-equity ratio of 0.27, a current ratio of 2.32 and a quick ratio of 1.92.

A. O. Smith (NYSE:AOS) last announced its quarterly earnings data on Wednesday, October 25th. The industrial products company reported $0.54 earnings per share for the quarter, topping the Thomson Reuters’ consensus estimate of $0.53 by $0.01. The company had revenue of $749.90 million for the quarter, compared to analyst estimates of $741.28 million. A. O. Smith had a return on equity of 22.42% and a net margin of 12.18%. A. O. Smith’s revenue for the quarter was up 9.7% compared to the same quarter last year. During the same quarter last year, the firm earned $0.47 EPS. equities research analysts anticipate that A. O. Smith will post 2.13 EPS for the current fiscal year.

In other news, CEO Ajita G. Rajendra sold 15,000 shares of the business’s stock in a transaction on Tuesday, November 28th. The stock was sold at an average price of $61.81, for a total transaction of $927,150.00. Following the completion of the sale, the chief executive officer now owns 299,369 shares in the company, valued at $18,503,997.89. The transaction was disclosed in a filing with the SEC, which is available at this hyperlink. Also, insider Peter R. Martineau sold 22,267 shares of the business’s stock in a transaction on Tuesday, October 31st. The stock was sold at an average price of $59.33, for a total value of $1,321,101.11. Following the sale, the insider now owns 17,528 shares of the company’s stock, valued at approximately $1,039,936.24. The disclosure for this sale can be found here. In the last quarter, insiders sold 100,156 shares of company stock valued at $6,092,537. Corporate insiders own 1.27% of the company’s stock.

Several hedge funds have recently added to or reduced their stakes in the company. Schwab Charles Investment Management Inc. increased its holdings in A. O. Smith by 6.5% in the second quarter. Schwab Charles Investment Management Inc. now owns 553,602 shares of the industrial products company’s stock valued at $31,185,000 after purchasing an additional 33,790 shares during the last quarter. Legal & General Group Plc increased its holdings in A. O. Smith by 16.0% in the second quarter. Legal & General Group Plc now owns 265,898 shares of the industrial products company’s stock valued at $14,978,000 after purchasing an additional 36,599 shares during the last quarter. Marshall Wace North America L.P. increased its holdings in A. O. Smith by 477.9% in the second quarter. Marshall Wace North America L.P. now owns 52,267 shares of the industrial products company’s stock valued at $2,927,000 after purchasing an additional 43,223 shares during the last quarter. State Board of Administration of Florida Retirement System grew its stake in A. O. Smith by 0.5% in the second quarter. State Board of Administration of Florida Retirement System now owns 188,104 shares of the industrial products company’s stock valued at $10,596,000 after acquiring an additional 905 shares during the period. Finally, GAM Holding AG grew its stake in A. O. Smith by 26.4% in the second quarter. GAM Holding AG now owns 19,968 shares of the industrial products company’s stock valued at $1,125,000 after acquiring an additional 4,170 shares during the period. Institutional investors own 74.89% of the company’s stock.

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About A. O. Smith

A. O. Smith Corporation operates through two segments: North America and Rest of World. The Company’s Rest of World segment primarily consists of China, Europe and India. Both segments manufacture and market comprehensive lines of residential and commercial gas, gas tankless and electric water heaters, as well as water treatment products.

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