In a report published Friday, Stifel analyst Robert McCarthy initiated coverage on A.O. Smith Corp (NYSE: AOS) with a Hold rating.
In the report, Stifel noted, “We are initiating coverage of A.O. Smith (AOS) with a Hold rating and assign $60 as fair value on the shares. Despite our view that A.O. Smith has (1) managed its portfolio exceedingly well; (2) pioneered a strong international growth strategy and (3) maintained balance sheet optionality, we are neutral on the shares, given concerns around international exposure and execution (China growth sustainability), M&A redeployment execution due to high multiples paid in riskier growth regions throughout the world, and the stock's relatively full valuation at nearly 20x our FY15E EPS estimate. That said, we remain impressed with company and management execution and the strong secular tailwinds, so we would readily revisit our rating on pullbacks. Our fair value is $60, or 19x 2016E EPS of $3.15, the higher end of the company's historical range, given recognition of AOS' fundamentally strong growth story.”
A.O. Smith closed on Thursday at $53.45.
Latest Ratings for AOS
| Dec 2014 | Stifel Nicolaus | Initiates Coverage on | Hold | |
| Jul 2014 | Northland Securities | Initiates Coverage on | Outperform | |
| Apr 2014 | Sterne Agee | Upgrades | Neutral | Buy |
View More Analyst Ratings for AOS
View the Latest Analyst Ratings
See more from Benzinga
-
UPDATE: Bank Of America Reiterates On Office Depot On Possible Acquisition By Staples
-
UPDATE: Morgan Stanley Downgrades Mindray Medical International As Uncertainties Linger
-
UPDATE: Bank Of America Upgrades Staples On Strengths Magnified By Combination
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.