A. O. Smith Looks Attractive At The Current Valuation


  • In the near term, the company’s revenue should benefit from higher price realization, easing supply chain challenges, and volume growth in the water treatment and boiler businesses.
  • The margins should benefit from the pricing actions taken and the mix of the business.
  • Valuation is cheap.

bull and chart for business or bull market trader concept


Investment Thesis

A. O. Smith (NYSE:AOS) is experiencing softness in demand for commercial and residential water heaters, however, the order rates and backlog levels in the boilers and water treatment businesses remain strong. This should benefit the volumes in 2H FY22, partially

AOS adjusted operating margins

AOS adjusted operating margins (Company data, GS Analytics Research)

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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