Milwaukee, Wisconsin-based A.O. Smith Corporation (AOS) manufactures residential and commercial gas and electric water heaters, boilers, heat pumps, tanks, and water treatment products. With a market cap of $10.3 billion, A.O. Smith’s operations span various countries in North America, Europe, and Asia.

The company has significantly underperformed the broader market over the past year. AOS stock prices have plummeted 12.1% over the past 52 weeks and gained 6.4% on a YTD basis, compared to the S&P 500 Index’s ($SPX) 14.3% surge over the past year and 9.5% return in 2025.

Narrowing the focus, A.O. Smith has also underperformed the sector-focused Industrial Select Sector SPDR Fund’s (XLI) 17.3% surge over the past 52 weeks and 15.1% gains on a YTD basis.

A.O. Smith’s stock prices gained 3.6% in the trading session following the release of its better-than-expected Q2 results on Jul. 24. The company’s overall remained grim, but was about market expectations. It observed experienced boiler sales during the quarter, but it was more than offset by lower sales in China and lower water heater volumes in North America. Overall, its topline came in at $1 billion, down 1.3% year-over-year, but 2.1% ahead of Street expectations.

Meanwhile, A.O. Smith’s net earnings declined 2.6% year-over-year to $152.2 million, but its EPS of $1.07 surpassed the consensus estimates by a notable 10.3%.

For the full fiscal 2025, ending in December, analysts expect AOS to deliver an EPS of $3.83, up 2.7% year-over-year. The company has a mixed earnings surprise history. While it met or surpassed the Street’s bottom-line estimates thrice over the past four quarters, it has missed the projections on one other occasion.

The stock has a consensus “Moderate Buy” rating overall. Of the 14 analysts covering the AOS stock, opinions include four “Strong Buys,” nine “Holds,” and one “Strong Sell.”

This configuration has remained mostly stable in recent months.

On Jul. 29, UBS (UBS) analyst Damian Karas maintained a “Neutral” rating on AOS and increased the price target from $74 to $76.

As of writing, A.O. Smith’s mean price target of $80.09 represents a 10.4% premium to current price levels. Meanwhile, the Street-high target of $89 suggests a notable 22.7% upside potential.