This story originally appeared on Zacks
AO Smith (AOS) closed at $82.94 in the last trading session, recording a -1.24% move from the day before. This change was narrower than the S&P 500’s daily loss of 1.42%. Meanwhile, the Dow Jones lost 0.49%, and the tech-heavy Nasdaq lost 0.47%.
Ahead of today’s trading session, the share prices of the water heater and boiler manufacturer rose by 0.37% over the past month. This outpaced the Industrial Products sector’s gain of 0.21% and backtracked on the S&P 500’s gain of 0.39% in the time.
Investors are hoping for some strength from AO Smith as it nears its next earnings release, which is expected on January 27, 2022. The company is expected to report earnings per share of $0.77, up 4.05% from the previous quarter. Meanwhile, our latest consensus estimate is $965.74 million in revenue, an increase of 15.73% over the prior year quarter.
Investors may also notice recent changes in analyst estimates for AO Smith. Recent reviews tend to reflect the latest near-term business trends. As a result, we can interpret positive rating reviews as a good sign of the company’s business outlook.
Research indicates that these discretionary revisions are directly related to the stock’s near-term price momentum. We developed Zacks Rank to take advantage of this phenomenon. Our system takes these discretionary changes into account and provides a clear and actionable rating model.
The Zacks Rank system, which ranges from #1 (strong buy) to #5 (strong sell), has an impressive externally audited track record of outperformance, with the #1 stock having achieved a +25% average annual return since 1988. The Zacks Rank has declined Zacks Consensus estimated EPS by 0.45% over the past month. AO Smith currently has a Zacks rating of #4 (sell).
In terms of valuation, AO Smith is currently trading at a forward P/E ratio of 23.89. For comparison, its industry has an average forward P/E of 23.89, which means AO Smith is trading without any noticeable deviation from the group.
Investors should also note that AOS has a PEG ratio of 2.65 at the moment. This metric is used similarly to the popular P/E ratio, but the PEG ratio also takes into account the expected earnings growth rate for the stock. The average price/expense ratio for the AOS industry is 2.05 as of yesterday’s close.
Manufacturing – the electronics industry is part of the industrial products sector. The industry currently has a Zacks Industry Rating of 105, placing it in the top 42% of all 250+ industries.
The Zacks Industry Ranking measures the strength of our individual industry groups by measuring the average Zacks rating of the individual stocks within the groups. Our research shows that industries ranked 50% outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to keep track of all these stock movement metrics and more in upcoming trading sessions.
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