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AOS vs ITW
Which Stock Would AI Choose? A.O. Smith (AOS) vs. Illinois Tool Works (ITW) Stock Comparison
Key Takeaways
- AOS is a focused water-heating and water-treatment specialist, while ITW is a diversified industrial manufacturer spanning seven business segments.
- ITW has shown stronger recent momentum, raising its full-year 2026 guidance on broad-based demand, while AOS has narrowed guidance amid residential water-heater softness and China weakness.
- AOS is managing a structural decline in its China business and restructuring its North America water-treatment unit, weighing on sentiment.
- Both companies are established dividend payers and active share repurchasers, reflecting disciplined capital allocation.
- Relative performance and market positioning favor ITW on trend consistency, though AOS offers a more focused, value-oriented profile.
- For further detail, explore AOS Major News and AOS Today's Price Move, as well as ITW Major News and ITW Today's Price Move.
- To see how AI evaluates these and other tickers in real time, visit the Trending AI Robots page.
Introduction
Investors comparing AOS (A.O. Smith Corporation) and ITW (Illinois Tool Works Inc.) are essentially weighing two different models of industrial durability. A.O. Smith is a concentrated water-technology franchise, while Illinois Tool Works is a diversified, multi-segment manufacturer. This stock comparison is most relevant for traders and long-term investors seeking to assess relative performance, market positioning, and resilience across housing, industrial, and global end markets. The two names offer a useful contrast between a focused, value-oriented operator navigating near-term headwinds and a broad industrial compounder riding steadier demand trends.
AOS Overview and Recent Performance
A.O. Smith Corporation is a global leader in water heating and water treatment, with a dominant North American water-heater franchise and a secondary business in China. In recent weeks, AOS has faced a mixed fundamental picture. Second-quarter 2026 sales reached roughly $1 billion, supported by the January 2026 acquisition of Leonard Valve (about $470 million) and carryover pricing, but residential water-heater volumes remained soft. China sales have declined by double digits in local currency, reflecting weak consumer demand and the wind-down of stimulus programs.
These pressures have shaped sentiment. The company narrowed its full-year sales growth outlook to 2%–3% and its adjusted EPS (earnings per share) range, and analysts trimmed price targets, with one firm downgrading the stock to Hold. Offsetting factors include a 6% dividend increase, a 50% boost to the 2026 share-repurchase target to $300 million, and a restructuring of the North America water-treatment segment aimed at expanding margins. The stock has underperformed over the past year, reflecting the drag from China and housing-market softness.
ITW Overview and Recent Performance
Illinois Tool Works Inc. is a diversified industrial manufacturer organized across seven segments, including Automotive OEM (original equipment manufacturer), Food Equipment, Welding, Test & Measurement and Electronics, Polymers & Fluids, Construction Products, and Specialty Products. In recent market activity, ITW has delivered comparatively stronger results. Second-quarter 2026 revenue rose 6.1% to $4.30 billion, with 4.5% organic growth, and the company reported a record operating margin of 26.7%.
Management raised its full-year 2026 earnings guidance to $11.35–$11.55 per share and lifted its revenue-growth forecast to 4%–5%, citing strength in capital-expenditure (CapEx) driven segments such as Welding, Test & Measurement and Electronics, and Polymers & Fluids. Sentiment has benefited from customer-back innovation (new products contributing incremental revenue) and resilient industrial demand. The company also hiked its dividend by 7% and announced a fresh $6 billion buyback authorization. Softer spots include foodservice equipment demand and weak global vehicle production, but the overall trend has been steadier than that of AOS.
Trending AI Robots
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Head-to-Head Comparison
The core contrast between AOS and ITW lies in diversification and cyclical exposure. A.O. Smith is concentrated in water heating and treatment, giving it strong pricing power and high share in a mature North American market, but also exposing it to housing turnover and a structurally challenged China segment. Illinois Tool Works spreads risk across seven segments and multiple geographies, which has helped it sustain growth even as automotive production and foodservice equipment soften.
On momentum, ITW has been raising guidance and posting record margins, while AOS has been narrowing expectations and absorbing restructuring costs. On valuation, AOS trades at a lower multiple and carries a more discounted profile relative to some fair-value estimates, whereas ITW trades near or modestly above peer P/E (price-to-earnings) levels. Risk factors differ as well: A.O. Smith faces China and residential-demand uncertainty, while ITW faces price-cost timing lags and end-market cyclicality. Both reward shareholders through dividends and buybacks, but their growth drivers and sentiment profiles currently diverge.
Tickeron AI Verdict
Based on observable factors, Tickeron's AI would likely favor ITW in the current environment. The stock exhibits more consistent trend characteristics, with rising guidance, broad-based organic growth, record margins, and resilient capital-expenditure demand, whereas AOS is contending with softer residential volumes, a declining China business, and downward guidance revisions. The relative positioning favors Illinois Tool Works on momentum and stability. That said, the comparison is not one-sided: A.O. Smith's focused franchise, pricing power, and discounted valuation could appeal to value-oriented strategies if housing and China conditions stabilize. The verdict reflects probabilities based on current data rather than a definitive outcome.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is AOS is a Buy and ITW is a Hold.
AOS in upward trend: 10-day moving average broke above 50-day moving average on October 23, 2026
The 10-day moving average for AOS crossed bullishly above the 50-day moving average on October 23, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 11 of 15 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 73%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 14, 2026. You may want to consider a long position or call options on AOS as a result. In 45 of 80 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 56%.
The Moving Average Convergence Divergence (MACD) for AOS just turned positive on October 09, 2026. Looking at past instances where AOS's MACD turned positive, the stock continued to rise in 24 of 42 cases over the following month. The odds of a continued upward trend are 57%.
AOS moved above its 50-day moving average on October 20, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +4.92% 3-day Advance, the price is estimated to grow further. Considering data from situations where AOS advanced for three days, in 179 of 311 cases, the price rose further within the following month. The odds of a continued upward trend are 58%.
Bearish Trend Analysis
The 10-day RSI Indicator for AOS moved out of overbought territory on October 23, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 29 similar instances where the indicator moved out of overbought territory. In 12 of the 29 cases, the stock moved lower in the following days. This puts the odds of a move lower at 41%.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 8 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AOS declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 62%.
AOS broke above its upper Bollinger Band on October 22, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for AOS entered a downward trend on October 13, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 36 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 49 (best 1 - 100 worst), indicating steady price growth. AOS’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 55 (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 67 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (4.568) is normal, around the industry mean (3.933). P/E Ratio (17.197) is within average values for comparable stocks, (37.557). Projected Growth (PEG Ratio) (1.381) is also within normal values, averaging (1.879). Dividend Yield (0.023) settles around the average of (0.030) among similar stocks. P/S Ratio (2.085) is also within normal values, averaging (186.943).
The Tickeron Seasonality Score of 75 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Profit vs. Risk Rating rating for this company is 90 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. AOS’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 76, placing this stock worse than average.
Momentum Indicator for ITW turns positive, indicating new upward trend
ITW saw its Momentum Indicator move above the 0 level on October 13, 2026. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 90 similar instances where the indicator turned positive. In 58 of the 90 cases, the stock moved higher in the following days. The odds of a move higher are at 64%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where ITW's RSI Oscillator exited the oversold zone, 11 of 24 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 46%.
The Moving Average Convergence Divergence (MACD) for ITW just turned positive on October 08, 2026. Looking at past instances where ITW's MACD turned positive, the stock continued to rise in 24 of 47 cases over the following month. The odds of a continued upward trend are 51%.
ITW moved above its 50-day moving average on October 20, 2026 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for ITW crossed bullishly above the 50-day moving average on October 23, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 8 of 15 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 53%.
Following a +1.55% 3-day Advance, the price is estimated to grow further. Considering data from situations where ITW advanced for three days, in 164 of 325 cases, the price rose further within the following month. The odds of a continued upward trend are 50%.
ITW may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 8 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ITW declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 41%.
The Aroon Indicator for ITW entered a downward trend on October 07, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 13 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 27 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 33 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 76, placing this stock better than average.
The Tickeron Price Growth Rating for this company is 49 (best 1 - 100 worst), indicating steady price growth. ITW’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of 85 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of 96 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: ITW's P/B Ratio (27.183) is very high in comparison to the industry average of (3.933). P/E Ratio (24.975) is within average values for comparable stocks, (37.557). Projected Growth (PEG Ratio) (2.543) is also within normal values, averaging (1.879). Dividend Yield (0.025) settles around the average of (0.030) among similar stocks. P/S Ratio (4.699) is also within normal values, averaging (186.943).
AOS | ITW | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 24 | 38 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 67 Overvalued | 96 Overvalued | |
PROFIT vs RISK RATING 1..100 | 90 | 33 | |
SMR RATING 1..100 | 36 | 13 | |
PRICE GROWTH RATING 1..100 | 49 | 49 | |
P/E GROWTH RATING 1..100 | 55 | 27 | |
SEASONALITY SCORE 1..100 | 75 | 85 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
AOS's Valuation (67) in the Building Products industry is in the same range as ITW (96) in the Industrial Machinery industry. This means that AOS’s stock grew similarly to ITW’s over the last 12 months.
ITW's Profit vs Risk Rating (33) in the Industrial Machinery industry is somewhat better than the same rating for AOS (90) in the Building Products industry. This means that ITW’s stock grew somewhat faster than AOS’s over the last 12 months.
ITW's SMR Rating (13) in the Industrial Machinery industry is in the same range as AOS (36) in the Building Products industry. This means that ITW’s stock grew similarly to AOS’s over the last 12 months.
ITW's Price Growth Rating (49) in the Industrial Machinery industry is in the same range as AOS (49) in the Building Products industry. This means that ITW’s stock grew similarly to AOS’s over the last 12 months.
ITW's P/E Growth Rating (27) in the Industrial Machinery industry is in the same range as AOS (55) in the Building Products industry. This means that ITW’s stock grew similarly to AOS’s over the last 12 months.
| AOS | ITW | |
|---|---|---|
| RSI ODDS (%) | 1 day ago 41% | 1 day ago 46% |
| Stochastic ODDS (%) | 1 day ago 57% | 1 day ago 44% |
| Momentum ODDS (%) | 1 day ago 56% | 1 day ago 64% |
| MACD ODDS (%) | 1 day ago 57% | 1 day ago 51% |
| TrendWeek ODDS (%) | 1 day ago 58% | 1 day ago 53% |
| TrendMonth ODDS (%) | 1 day ago 51% | 1 day ago 51% |
| Advances ODDS (%) | 5 days ago 58% | 5 days ago 50% |
| Declines ODDS (%) | 8 days ago 62% | 27 days ago 41% |
| BollingerBands ODDS (%) | 1 day ago 61% | 1 day ago 59% |
| Aroon ODDS (%) | 1 day ago 71% | 1 day ago 47% |
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is overvalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
AOS’s FA Score shows that 0 FA rating(s) are green while ITW’s FA Score has 3 green FA rating(s).
- AOS’s FA Score: 0 green, 5 red.
- ITW’s FA Score: 3 green, 2 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
AOS’s TA Score shows that 5 TA indicator(s) are bullish while ITW’s TA Score has 7 bullish TA indicator(s).
- AOS’s TA Score: 5 bullish, 5 bearish.
- ITW’s TA Score: 7 bullish, 3 bearish.
Price Growth
AOS (@Industrial Machinery) experienced а +5.50% price change this week, while ITW (@Industrial Machinery) price change was +2.24% for the same time period.
The average weekly price growth across all stocks in the @Industrial Machinery industry was -4.06%. For the same industry, the average monthly price growth was -16.06%, and the average quarterly price growth was -19.55%.
Reported Earning Dates
AOS is expected to report earnings on Oct 29, 2026.
ITW is expected to report earnings on Oct 27, 2026.
Industries' Descriptions
@Industrial Machinery (-4.06% weekly)The industry makes and maintains machines for consumers, the industry, and most other companies. While it has traditionally been categorized as heavy industry, some smaller companies are also branching into the light category. The industry is pivotal in providing the equipment for production in businesses like agriculture, mining, industry and construction, gas, electricity and water utilities. It also supplies supporting equipment for almost all sectors of the economy, such as equipment for heating, and air conditioning of buildings. Illinois Tool Works Inc., Parker-Hannifin Corporation and Rockwell Automation Inc are some of the major U.S. companies operating in this industry.
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ITW and
Correlation & Price change
A.I.dvisor indicates that over the last year, ITW has been closely correlated with IR. These tickers have moved in lockstep 74% of the time. This A.I.-generated data suggests there is a high statistical probability that if ITW jumps, then IR could also see price increases.