Zacks Research Upgrades AAON (NASDAQ:AAON) to "Strong-Buy"

Key Points

• Zacks Research upgraded AAON from “hold” to “strong-buy.” Across analysts, the stock has a “moderate buy” consensus rating and an average price target of $106.33.
• AAON reported quarterly EPS of $0.83, beating the $0.57 consensus, while revenue reached $707.4 million—up 84.1% year over year.
• Management raised its full-year sales-growth outlook to 72%–75%, citing strong demand that includes data-center cooling systems.

AAON (NASDAQ:AAON - Get Free Report) was upgraded by equities research analysts at Zacks Research from a "hold" rating to a "strong-buy" rating in a research report issued on Thursday, Zacks reports.

Several other equities research analysts have also recently commented on AAON. Robert W. Baird cut their price objective on shares of AAON from $110.00 to $104.00 and set an "outperform" rating on the stock in a research report on Tuesday, November 10th. DA Davidson began coverage on AAON in a report on Tuesday, September 15th. They set a "buy" rating and a $110.00 target price for the company. KeyCorp reiterated a "sector weight" rating on shares of AAON in a report on Thursday, August 13th. Weiss Ratings reissued a "hold (c)" rating on shares of AAON in a research note on Monday, October 12th. Finally, Oppenheimer restated an "outperform" rating and issued a $105.00 price target (down from $115.00) on shares of AAON in a report on Tuesday. One analyst has rated the stock with a Strong Buy rating, four have given a Buy rating and two have issued a Hold rating to the company's stock. According to data from MarketBeat, AAON currently has an average rating of "Moderate Buy" and an average target price of $106.33.

AAON Stock Up 1.8%

AAON stock traded up $1.45 during mid-day trading on Thursday, hitting $80.25. 1,460,830 shares of the company were exchanged, compared to its average volume of 1,567,883. The company has a debt-to-equity ratio of 0.36, a quick ratio of 2.01 and a current ratio of 2.82. The firm has a market cap of $6.62 billion, a P/E ratio of 33.72, a P/E/G ratio of 1.29 and a beta of 1.45. The firm's 50 day simple moving average is $76.86 and its 200 day simple moving average is $96.48. AAON has a 1-year low of $53.13 and a 1-year high of $150.46.

AAON (NASDAQ:AAON - Get Free Report) last released its quarterly earnings results on Monday, November 9th. The construction company reported $0.83 earnings per share for the quarter, beating the consensus estimate of $0.57 by $0.26. AAON had a net margin of 8.75% and a return on equity of 20.23%. The company had revenue of $707.43 million during the quarter, compared to analysts' expectations of $601.19 million. During the same quarter in the prior year, the company earned $0.37 earnings per share. The business's quarterly revenue was up 84.1% compared to the same quarter last year. On average, sell-side analysts predict that AAON will post 2.66 EPS for the current fiscal year.

Insider Buying and Selling

In other AAON news, Director David Stewart bought 1,000 shares of AAON stock in a transaction that occurred on Tuesday, September 15th. The stock was acquired at an average price of $74.66 per share, for a total transaction of $74,660.00. Following the completion of the acquisition, the director owned 4,000 shares of the company's stock, valued at $298,640. This trade represents a 33.33% increase in their position. The purchase was disclosed in a legal filing with the SEC, which can be accessed through the SEC website. Also, EVP Matthew Shaub bought 457 shares of the firm's stock in a transaction that occurred on Friday, August 28th. The stock was acquired at an average cost of $76.42 per share, with a total value of $34,923.94. Following the transaction, the executive vice president owned 3,136 shares of the company's stock, valued at $239,653.12. This represents a 17.06% increase in their position. The disclosure for this purchase is available in the SEC filing. 18.09% of the stock is owned by company insiders.

Hedge Funds Weigh In On AAON

Large investors have recently modified their holdings of the business. Marshall Wace LLP grew its holdings in shares of AAON by 13,668.3% in the 3rd quarter. Marshall Wace LLP now owns 368,714 shares of the construction company's stock valued at $30,515,000 after acquiring an additional 366,036 shares in the last quarter. Healthcare of Ontario Pension Plan Trust Fund bought a new stake in AAON during the third quarter worth about $4,196,000. State Board of Administration of Florida Retirement System raised its holdings in AAON by 0.5% during the third quarter. State Board of Administration of Florida Retirement System now owns 50,911 shares of the construction company's stock worth $4,213,000 after acquiring an additional 242 shares in the last quarter. AlphaGrep UK Ltd boosted its position in AAON by 29.0% during the third quarter. AlphaGrep UK Ltd now owns 5,415 shares of the construction company's stock valued at $448,000 after purchasing an additional 1,217 shares during the last quarter. Finally, First Trust Advisors LP boosted its position in AAON by 31.9% during the third quarter. First Trust Advisors LP now owns 2,082,991 shares of the construction company's stock valued at $172,388,000 after purchasing an additional 503,819 shares during the last quarter. 70.81% of the stock is currently owned by institutional investors and hedge funds.

Key AAON News

Here's some of the latest news about AAON:

• Positive Sentiment: AAON reported record third-quarter revenue of $707.4 million, up 84.1% year over year, and EPS of $0.83, above the $0.57 consensus estimate. Management raised its full-year sales-growth outlook to 72%–75%, citing strong demand that includes data-center cooling systems. Why AAON Stock Surged 37.8% This Week
• Positive Sentiment: The company expanded and refinanced its senior credit facility, increasing potential borrowing capacity from $600 million to as much as $1.2 billion. The added capacity may help fund continued growth, though borrowing availability is not the same as cash on hand. The Aaon Group Announces Expansion of Credit Facility
• Neutral Sentiment: Analyst price targets imply potential upside, and one valuation article described the shares as possibly undervalued. These are estimates rather than assured returns, particularly after a sharp recent rally. AAON Could Be 33% Undervalued

About AAON

AAON, Inc. designs and manufactures heating, ventilation and air-conditioning (HVAC) equipment for commercial and industrial buildings. Founded in 1988, the company is headquartered in Tulsa, Oklahoma, and sells products under the AAON and BASX brands. Its products include rooftop units, chillers, air-handling units, heat pumps and other custom HVAC systems. BASX specializes in equipment for data centers and other demanding applications, while AAON also offers controls and related services. AAON serves customers primarily in North America, with products also reaching international markets through its sales and distribution network.

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