- A.O. Smith may have more leverage to ESG themes than commonly appreciated, as water heaters could be another area where governments target energy efficiency gains.
- Water treatment is a growing, sizable, but fragmented, market opportunity in North America, and one that A.O. Smith will likely address through more M&A.
- Price hikes and production challenges could open a window of opportunity for a new rival in the U.S. water heater space.
- A.O. Smith shares look, at best, modestly undervalued on mid-to-high single-digit revenue and FCF growth prospects.
For further details see:
A. O. Smith Has Some Attractive Growth Angles, But The Valuation Isn't A Clear Bargain