This story originally appeared on Zacks
AO Smith (AOS) closed the last trading day at $83.54, up -1.67% from the previous trading session. This move was narrower than the S&P 500’s daily loss of 1.94%. Meanwhile, the Dow Jones lost 1.07%, and the tech-heavy Nasdaq lost 0.39%.
Ahead of today’s trading, shares of the water heater and boiler maker are up 2.5% over the past month. This slowed the Industrial Products segment’s gain by 4.53% and the S&P 500’s gain by 5.72% in that time.
Wall Street will be looking for positivity from AO Smith as it approaches the next earnings report date. In this report, analysts expect AO Smith to report earnings of $0.77 per share. This represents an annual growth of 4.05%. Meanwhile, our latest consensus estimate calls for revenue of $965.74 million, an increase of 15.73% over the prior year quarter.
Investors should also note any recent changes to analyst estimates for AO Smith. These recent reviews tend to reflect the evolving nature of short-term business trends. With this in mind, we can take the positive rating reviews as a sign of optimism about the company’s business outlook.
Based on our research, we believe that these discretionary reviews are directly related to stock movements close to the team. Investors can take advantage of this using Zacks Rank. This model takes into account these changes in grading and provides a simple and actionable rating system.
Ranging from #1 (strong buy) to #5 (strong sell), the Zacks Rank system has a proven and externally audited track record of outperforming, with the #1 stock returning an average of +25% annually since 1988. Over the past month, Zacks Consensus EPS estimate is down 0.45%. AO Smith currently has a Zacks rating of #3 (Hold).
In terms of valuation, AO Smith is currently trading at a forward P/E ratio of 24.17. Its industry has an average forward P/E of 24.17, so one might conclude that AO Smith is trading with no discernible skew relatively.
Investors should also note that AOS has a PEG ratio of 2.69 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. Manufacturing – Electronics was holding an average PEG of 2.11 at yesterday’s closing price.
Manufacturing – the electronics industry is part of the industrial products sector. This group has a 98 Zacks Industry Rating, placing it in the top 39% 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.
To follow AOS in upcoming trading sessions, be sure to use Zacks.com.
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