Bessemer Completes Sale of Leonard Valve to A. O. Smith
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 06 2026
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Should l Buy AOS?
Source: Newsfilter
- Successful Transition: Bessemer's partnership with Leonard Valve's third-generation owner, Niles Wilcox, since 2019 has led to a smooth ownership transition and enhanced management team, ensuring stability as the company is sold to A. O. Smith.
- Market Expansion: With Bessemer's support, Leonard Valve has tripled its digital and thermostatic mixing product offerings, significantly increasing market share and solidifying its leadership in health, safety, and energy efficiency.
- Strategic Acquisition: Leonard Valve's acquisition of Heat-Timer Corporation has broadened its platform in water and hydronic system management, enhancing its competitiveness in commercial heating controls and energy management systems.
- Future Outlook: Joining A. O. Smith will accelerate the adoption of Leonard Valve's digital and thermostatic mixing solutions, expand its advanced boiler control offerings, and deliver a more integrated product suite to meet critical customer needs.
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Analyst Views on AOS
Wall Street analysts forecast AOS stock price to fall
8 Analyst Rating
2 Buy
6 Hold
0 Sell
Hold
Current: 79.620
Low
75.00
Averages
79.17
High
85.00
Current: 79.620
Low
75.00
Averages
79.17
High
85.00
About AOS
A. O. Smith Corporation applies technologies and solutions to products manufactured and marketed worldwide. The Company operates through two segments: North America and Rest of World. Both the segments manufacture and market a comprehensive line of residential and commercial gas and electric water heaters, boilers, tanks, and water treatment products. Its Rest of World segment is primarily comprised of China, Europe, and India. The North America segment serves residential and commercial end markets with a range of products, including water heaters, boilers, water treatment products, and others. The Company also manufactures expansion tanks, commercial solar water heating systems, swimming pool and spa heaters, related products and parts. Its Lochinvar brand is a residential and commercial boiler brand in the United States. Its water softener branded products and problem well water solutions include the Hague, Water-Right, Master Water, Atlantic Filter, Impact, and Water Tec brands.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Revenue Performance: The company’s Q4 revenue reached $912.5 million, falling short of analysts' expectations of $928 million, reflecting challenges in sales due to weak demand in China.
- Cash Flow and Buybacks: In 2025, A.O. Smith generated $616.8 million in operating cash flow and $546.0 million in free cash flow, while repurchasing 5.9 million shares for $400.8 million, extending its 86-year dividend payment streak.
- 2026 Outlook: A.O. Smith forecasts net sales of $3.9 billion to $4.02 billion for 2026, exceeding the consensus estimate of $3.80 billion, although management remains cautious about challenges in China and stable residential demand in North America.
See More
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- Sales Growth: A. O. Smith reported $3.8 billion in sales for 2025, a slight increase over the previous year, despite a 12% decline in China sales, with North American commercial water heater and boiler volumes partially offsetting this impact.
- Profitability Improvement: The company achieved a record EPS of $3.85, a 6% increase year-over-year, with North America segment earnings of $728 million rising 2% compared to 2024, indicating ongoing margin enhancement.
- Strategic Acquisition: The completion of the Leonard Valve acquisition expands A. O. Smith's reach in the water management market, enhancing digital capabilities and product portfolio, which is expected to drive future growth.
- 2026 Outlook: The company projects an EPS range of $3.85 to $4.15 for 2026, reflecting confidence in future growth, although challenges remain in the Chinese market, where sales are expected to decline in the mid-single digits.
See More
A O Smith AOS Q4 2025 Earnings Call Transcript
See More
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- Earnings Growth: A.O. Smith's fourth-quarter net income reached $125.4 million, translating to $0.90 per share, which is a significant increase from last year's $109.7 million and $0.75 per share, indicating enhanced profitability.
- Stable Revenue: The company's fourth-quarter revenue stood at $912.5 million, showing a marginal increase of 0.0% from $912.4 million last year, reflecting stable sales performance in the market environment.
- Adjusted Earnings: Excluding non-recurring items, A.O. Smith reported adjusted earnings of $125.4 million, or $0.90 per share, demonstrating the robustness of its core business operations.
- Year-over-Year Comparison: Compared to the same period last year, A.O. Smith achieved growth in both net income and earnings per share, highlighting the company's strong profitability and market adaptability in a competitive landscape.
See More
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- Solid Sales Performance: A.O. Smith achieved $3.8 billion in sales for 2025, a slight increase of 0.3% year-over-year, demonstrating sustained demand in the water heater and boiler markets despite challenges in residential water heater volumes.
- Profitability Improvement: The company reported net earnings of $546.2 million for 2025, up 2.2% from 2024, with a record EPS of $3.85, reflecting strong performance in the commercial water heater market.
- International Market Challenges: While sales in China decreased by 12%, organic sales in India grew by 13%, showcasing the company's adaptability and growth potential in diversified markets.
- Shareholder Return Strategy: In 2025, A.O. Smith repurchased 5.9 million shares at a cost of $400.8 million and declared a $0.36 per share dividend, marking 86 consecutive years of dividend payments, underscoring the company's commitment to its shareholders.
See More
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- Earnings Beat: A.O. Smith reported a Q4 non-GAAP EPS of $0.90, exceeding expectations by $0.06, indicating strong profitability and recovery in market demand.
- Significant Revenue Growth: The company achieved $3.8 billion in revenue for Q4, a staggering 316.5% year-over-year increase, surpassing market expectations by $2.87 billion, reflecting robust execution and heightened product demand.
- Strong Cash Flow: Free cash flow reached $546 million, fully converting to net earnings, demonstrating effective capital management and providing substantial support for shareholder returns.
- Optimistic Outlook: The company projects diluted EPS for 2026 to be between $3.85 and $4.15, exceeding the market consensus of $3.80, showcasing confidence in future growth and sustained profitability.
See More
