As previously reported, Stephens analyst Rob McCarthy downgraded Ingersoll-Rand (IR) to Equal Weight from Overweight. McCarthy modestly trimmed his estimates for Ingersoll-Rand for FY19 and FY20, as he sees incremental concern for growth and sustainability of the HVAC cycle, and lowered his price target on the stock to $122, down from $124. He also lowered his estimates across the Electrical Equipment and Multi-Industry group due to the delaying of business capital expenditure decisions that has been caused by macro deceleration and geopolitical uncertainty. He also cut his adjusted EPS forecasts for Rockwell Automation (ROK) for FY19 and FY20, though he keeps an Overweight rating on the stock. Overall in the group, McCarthy said he is "particularly concerned" about A.O. Smith (AOS), Lennox (LII) and Regal Beloit (RBC), on which he has Equal Weight ratings.

Stifel lowered the firm's price target on A.O. Smith to $90 from $91 and keeps a Hold rating on the shares. Expectations "seem to have been high" given that the stock sold off by nearly 5% after reporting what the firm views as "a solid quarter" with slightly better than consensus numbers, says the firm, which thinks some mixed commentary about margins moving forward was "likely the culprit."

Baird raised the firm's price target on A.O. Smith to $92 from $86 and keeps a Neutral rating on the shares. The firm said the company modestly exceeded consensus with strong NA margin performance, maintained full-year guidance and the upper end seems reasonable, company messaging and underlying expectations are largely the same, and the balance sheet remains a potential catalyst.

Wells Fargo analyst Joseph O'Dea lowered the firm's price target on Lennox to $520 from $545 and keeps an Overweight rating on the shares. A solid Q1 and full year raise still saw Lennox's stock down 2% vs. XLI down 80bps, the firm says. Wells thinks a lighter potential R454B tailwind in 2025 and M&A uncertainty overhang are two reasons. In the firm's view, growth potential remains compelling.

Reports Q1 revenue $978.8M, consensus $995.97M. "A. O. Smith delivered a strong performance in the first quarter primarily driven by higher sales of our commercial high efficiency water heaters and lower steel costs in North America as we saw continued healthy water heater demand. We achieved sales growth of 6% in China, despite the ongoing macroeconomic challenges in that country, as our recently released kitchen products continue to be well received in the market," noted Kevin Wheeler, chairman and chief executive officer. "I am pleased with our global team's efforts in servicing our customers during the quarter."

Consensus $19.72. Backs FY24 revenue up 7%, consensus $5.12B. Sees FY24 free cash flow $500M-$600M.