Jefferies Reiterates Buy on A.O. Smith

Jefferies is out with its report today on A.O. Smith (NYSE: AOS), reiterating Buy.

In its report, Jefferies writes, "We believe AOS will continue to navigate the weak NA resi environment well by leveraging its leading market positions in water heaters and growing presence in Asia. We expect continuing productivity improvements to benefit the margin. Additionally, Lochinvar establishes a new platform from which AOS can further perpetuate its acquisition strategy. We estimate AOS will end 2011 with no net debt. This is significant dry powder for additional M&A, which we believe will build earnings further."

Jefferies maintains a $53 PT on AOS.

Shares of AOS closed Thursday at $37.27.