A. O. Smith: Reiterating My Buy Rating After Strong Q1-22 Earnings


  • AOS reported strong Q1-22 earnings, beating both EPS and revenue estimates.
  • Company management cited inflation-related pricing impacts, exemplifying its ability to pass on costs to customers.
  • Geographic revenue mix continues to improve, citing robust demand outside of North America.
  • AOS continues to repurchase shares which should provide a valuation buffer in the near term.
  • I continue to hold the belief that AOS shares are undervalued, and assign a fair share price of $64.74, representing a ~9% upside opportunity.

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Revisiting My Prior Analysis

On 1/24/22, I wrote an article in which I elaborated on the growth in retail construction being a strong catalyst for A.O. Smith (NYSE:AOS) shares. I strongly recommend readers take a

Data by YCharts

Data by YCharts

Seeking Alpha Profitability Grade (<a href='https://seekingalpha.com/symbol/AOS' title='A. O. Smith Corporation'>AOS</a>)

Seeking Alpha Profitability Grade (AOS) (Seeking Alpha )

Company Outlook

Company Outlook (seekingalpha.com/news/3828714-ao-smith-sees-a-drop-in-trade-after-investors-sell-off-post-q1-revenue-eps-beat)

Data by YCharts

AOS Revenue Estimates

AOS Revenue Estimates (Image made by author using own estimates )


AOS DCF Model (Image made by author using own estimates )

Important Balance Sheet Metrics - AOS

Important Balance Sheet Metrics – AOS (Seeking Alpha Peers Tool )

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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