A.O. Smith initiated with a Neutral at Rosenblatt.

Rosenblatt analyst Scott Graham initiated coverage of A.O. Smith with a Neutral rating and $52 price target. The analyst notes that the slower residential markets in U.S. and China have led to an earnings inflection to the downside last year, adding that revenue and earnings have plummeted again this year. Graham believes that A.O. Smith earnings will turn positive in Q2 of FY20 thanks to North America Water Heater replacement, Water Treatment and Boiler sales, but margins in North America are near a peak and China will not recover until the 2nd half of 2020. The analyst adds that A.O Smith shares need to continue to trade at a relative discount.