A.O. Smith Corporation (AOS) shares edged lower on Wednesday after the company agreed to sell a majority stake in its China business. The move comes a day before A.O. Smith is scheduled to report third-quarter earnings on Oct. 29.

A.O. Smith Sells Majority Stake In China Business

CPE will acquire an 81% interest in A.O. Smith's China business, while the company will retain a 19% stake. A.O. Smith will also enter into a long-term brand licensing agreement that includes ongoing royalties.

The deal values the China business at about $400 million on a cash-free, debt-free basis. Including the net present value of the licensing economics, the company expects the total value to exceed $500 million.

The transaction will also allow A.O. Smith to repatriate about $80 million in cash currently held in China.

The company said it plans to prioritize share repurchases using the after-tax proceeds and repatriated cash following the closing.

The transaction is expected to close in the first half of 2027; the agreement follows a strategic review of the China business announced in July 2025.

Earnings Next In Focus

A.O. Smith is scheduled to report earnings on Oct. 29.

Analysts expect EPS of 90 cents, compared with 94 cents a year earlier. Revenue is expected at $960.23 million, up from $942.50 million in the prior-year period.

The stock carries a Hold consensus rating with an average price forecast of $65.33.

Recent analyst actions include Oppenheimer maintaining an Outperform rating and cutting its target to $72 on Oct. 21, Stifel downgrading the stock to Hold with a $59 target on Oct. 19, and Citigroup maintaining Neutral with a $64 target on July 31.

AOS Technical Levels To Watch

A.O. Smith is showing a mixed-to-bearish technical setup. Its 20-day and 50-day SMAs remain below the 200-day SMA, keeping the longer-term trend under pressure.

The RSI stands at 65.98, indicating solid buying interest without reaching overbought territory. Meanwhile, MACD remains above its signal line, pointing to improving short-term momentum.

Over the past 12 months, A.O. Smith shares have declined 7.15%.

The stock has traded between a 52-week high of $81.86 and a low of $54.16, placing it closer to the lower end of that range.

MarketDash Edge Shows Mostly Neutral Profile

Below is the MarketDash Edge scorecard for A.O. Smith, highlighting its strengths and weaknesses compared to the broader market:

• Growth: Neutral (Score: 35.36) — Growth factors are present, but not strong enough to dominate the setup.
• Momentum: Neutral (Score: 33.3) — The trend is improving, but the stock still isn't screening as a clear market leader.
• Quality: Neutral (Score: 53.09) — Fundamentals screen as middle-of-the-pack rather than standout strength.
• Value: Weak (Score: 19.97) — The valuation screen suggests the stock isn't showing up as a bargain on this model.

A.O. Smith's MarketDash Edge profile is mostly neutral, suggesting execution and upcoming earnings may drive the next move more than valuation.

AOS Price Action: A.O. Smith shares were down 0.57% at $62.00 at the time of publication on Wednesday, according to market data.