DA Davidson analyst Matt Summerville initiated A.O. Smith with a Buy rating and a price target of $72, saying the company offers an attractive long-term growth profile along with a "defensive backdrop" through its non-discretionary business. The analyst also points to a "favorable domestic construction market" as well as having significant presence in China, where it has established a niche in residential water heating. Over the near term, Summerville warns that A.O. Smith could experience some margin pressure due to U.S.-China trade frictions and surging steel prices.