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AOS · Analysis updated Nov 10, 2026, 6:00 PM ET
Why is A. O. Smith Corporation (AOS) stock moving?
A. O. Smith reported Q3 2026 adjusted EPS of $0.93, above the $0.90 estimate, but sales of $940.5M missed the $960.2M estimate, and it cut FY2026 adjusted EPS guidance to $3.42-$3.52 from $3.70-$3.85, below the $3.72 consensus. Management expects about 4% net sales growth excluding China. The company also agreed on Oct 27 to sell an 81% stake in its China business to CPE at a valuation of about $400M, keeping 19% and a long-term brand license; closing still needs regulatory approvals, and the proceeds could fund buybacks. Analysts reacted with mixed moves: Citigroup kept a Neutral rating and raised its target to $67, while Goldman Sachs raised its target to $58 from $55. An insider sale worth about $963K was reported Nov 6. Price action: the stock closed at $60.50 on Oct 28, rose on heavy volume (3.16M shares on Oct 29), peaked at a $67.07 close on Nov 4 and a $68.12 intraday high on Nov 5, then pulled back to $64.36 on Nov 10 as volume faded to 1.27M. The stock trades above the Goldman target, which weighs on upside, while the China exit and buyback potential support the longer view.
News behind the analysis
- A. O. Smith Insider Reports Sale of SharesAn insider sold shares worth approximately $963,285, according to a recent SEC filing.
- Citigroup Maintains Neutral on A.O. Smith, Raises Price Target to $67Citigroup kept its Neutral rating on A.O. Smith and raised its price target to $67.
- Goldman Sachs Adjusts Price Target on A. O. Smith to $58 From $55Goldman Sachs raised its price target on A. O. Smith from $55 to $58.
- A.O. Smith Q3 2026 Earnings Call TranscriptThe transcript of A. O. Smith's third-quarter 2026 earnings call, held after the Oct 29 results release.
- A. O. Smith Reports Third Quarter 2026 ResultsA. O. Smith reported its results for the quarter ended September 30, 2026, in an 8-K filing with the earnings release attached.
- A.O. Smith Q3 Adj. EPS $0.93 Beats $0.90 Estimate, Sales $940.500M Miss $960.234M EstimateAdjusted EPS of $0.93 beat the $0.90 estimate, while sales of $940.5M missed the $960.2M estimate.
- A.O. Smith Lowers FY2026 Adj EPS Guidance from $3.70-$3.85 to $3.42-$3.52 vs $3.72 Est; Sees Net sales growth, excluding China, of approximately 4%A. O. Smith cut its FY2026 adjusted EPS guidance to $3.42-$3.52 from $3.70-$3.85, below the $3.72 estimate, and expects net sales growth of about 4% excluding China.
- A.O. Smith To Divest Majority China Business Stake, Reward ShareholdersThe China stake sale unlocks cash that could fund shareholder buybacks.
- A. O. Smith to Sell 81% Stake in China Business to CPEA. O. Smith agreed to sell an 81% stake in its China business to CPE, keeping a 19% interest and a long-term brand license, subject to closing conditions and regulatory approvals.
- Reported Earlier, A. O. Smith To Sell 81% Of China Business To CPE At ~$400M Valuation, Retain 19% Stake And Long-Term Brand LicenseThe China sale values the business at roughly $400M, with A. O. Smith retaining a 19% stake and a long-term brand license.
About A.O. Smith Corporation
A. O. Smith is a Milwaukee-based water technology company and one of North America's largest makers of residential and commercial water heaters and boilers, with annual sales of roughly $3.8 billion. It's known for its leading market share in US water heaters, which are mostly replacement purchases. In October 2026 it agreed to sell an 81% stake in its China business to CPE, keeping a 19% stake and a long-term brand license.
How it makes money
Most of its sales come from the North America segment, roughly 80%. That segment sells residential and commercial water heaters, boilers, water treatment products and, since the Leonard Valve acquisition, valves. Many units replace failed water heaters and are sold through wholesalers, retailers and contractors. The Rest of World segment, mainly China plus India, makes up roughly 20% of sales. It sells water heaters and water purifiers to consumers, and China's share will shrink once the planned stake sale is completed.
What usually moves AOS
- US residential water heater replacement and new-construction demand
- Pricing actions versus steel and other input-cost inflation
- Commercial boiler and high-efficiency product growth
- China consumer demand and the planned China stake sale
- Tariffs, energy-efficiency regulation and share buybacks