A.O. Smith price target lowered to $72 from $73 at Goldman Sachs

Goldman Sachs lowered the firm’s price target on A.O. Smith to $72 from $73 and keeps a Sell rating on the shares. The firm is citing the company’s negative Q3 pre-announcement and guidance cut that were driven by ongoing weakness in China given the macro backdrop and North America water heater demand – both of which resulted in operating deleverage, the analyst tells investors in a research note. A.O. Smith management believes Q3 to be the low point, with a sequential improvement in volumes and profitability, but this could prove optimistic as comparisons remain more challenging through December, the firm added.