AO Smith (NYSE:AOS) Unlikely to Seel Electric Motors Unit, Downgraded

AO Smith (NYSE:AOS) had a nice bump up, but were downgraded by Hudson Securities on the unlikely scenario of them selling their electric motors unit.

Hudson said, "Shares have rallied most recently since ABB (Not Rated) announced its intent to acquire Baldor Electric (NYSE:BEZ), an electrical motor manufacturer that primarily serves industrial customers. The deal fueled speculation that A.O. Smith may sell its electrical motors business, which is mostly residential and commercial HVAC related.

"Outside of the M&A speculation, we see A.O. Smith continuing to deliver steady results given the high replacement content in both segments, but the company will likely not see tremendous top-line growth next year outside of China and its start-up in India."

AO Smith closed at $42.55, down $0.52, or 1.21 percent. Hudson Securities downgraded them from "Buy" to "Neutral."