Piper Jaffray Overweight On AO Smith

Piper Jaffray is out with a research report on AO Smith Corp. AOS and it has an Overweight rating and a $52 price target on shares. In a note to clients, Piper Jaffray writes, "Yesterday A.O. Smith announced an agreement with the DOJ on the sale of their electrical motor business to Regal Beloit. Under the agreement Regal will divest its existing U.S. pool and spa pump electric motor business and sell certain furnace related assets. The terms of the deal don't appear to have changed for A.O. Smith. We expect the company to have ~$370M+ of cash upon the closing of the divestiture and their recently announced $418M acquisition of Lochinvar. While A.O. Smith has been steadfast in maintaining the deal would ultimately be approved, the lengthy approval process gave investors reason for caution." Shares of AOS lost 31 cents yesterday to close at $36.89.