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RBC Bearings (RBC)
NYSE:RBC
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RBC Bearings
(NYSE:RBC)
73Outperform
Positive Factors
Financial Outlook
Increasing the price target to $347 reflects expectations for improved future performance and long-term opportunities for RBC.
Management Execution
Management execution remains strong as gross margins expanded.
Market Opportunities
RBC is well positioned to capitalize on low-hanging market share, selectively bidding on higher volume, more profitable opportunities.
Negative Factors
Boeing Strike Mitigation
RBC noted it was able to mitigate headwinds from the Boeing strike with strong demand from other customers and it expects to continue to do so in 3QFY25.
Cash Flow Performance
RBC reported operating cash flow of $43mn, below consensus of $130mn by 67% and below MSe of $53mn by 18.9%.
Estimate Revisions
Recent estimate revisions post-F2Q25 indicate a positive reassessment of RBC's financial outlook.
RBC Bearings (RBC) vs. S&P 500 (SPY)
Market Cap
$10.47B
Dividend YieldN/A
Average Volume (3M)148.76K
Price to Earnings (P/E)46.2
Beta (1Y)1.10
Revenue Growth4.62%
EPS Growth21.58%
CountryUS
Employees5,302
SectorIndustrials
Sector Strength66
IndustryManufacturing - Tools & Accessories
Share Statistics
EPS (TTM)7.29
Shares Outstanding31,444,244
10 Day Avg. Volume190,493
30 Day Avg. Volume148,765
Financial Highlights & Ratios
PEG Ratio2.14
Price to Book (P/B)N/A
Price to Sales (P/S)6.44
Price to Cash Flow (P/CF)30.90
P/FCF Ratio27.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$396.25Price Target Upside24.93% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
RBC Bearings Business Overview & Revenue Model
Company DescriptionRBC Bearings Incorporated (RBC) is a leading international manufacturer and marketer of highly engineered precision bearings and components. The company operates in several sectors, including aerospace, defense, industrial, and heavy equipment. RBC's core products include roller bearings, ball bearings, and plain bearings, catering to a wide array of industrial applications where high precision and reliability are critical.
How the Company Makes MoneyRBC Bearings generates revenue primarily through the manufacturing and sale of precision bearings and related components. The company's key revenue streams include sales to original equipment manufacturers (OEMs) and the aftermarket sector. RBC's products are essential in the aerospace and defense industries, contributing significantly to its earnings. Additionally, RBC benefits from long-term relationships and partnerships with strategic customers in various sectors, ensuring a steady demand for its products. The company also invests in research and development to innovate and maintain a competitive edge in producing high-performance bearings, which supports its pricing power and profitability.
RBC Bearings Financial Statement Overview
Summary
RBC Bearings presents a strong financial profile with consistent revenue growth, solid profitability margins, and a stable balance sheet. The company effectively manages cash flows, supporting its ongoing operations and growth strategies. While the financial statements reflect robust health, there is potential for further enhancement in profit margins and asset utilization.Income Statement
RBC Bearings demonstrates strong revenue growth with a notable increase in net income over recent years. The company maintains healthy gross and EBIT margins, reflecting operational efficiency. There is consistent improvement in EBITDA margin, indicating solid earnings before non-operating expenses. These factors contribute to a high score, although there is room for improvement in net profit margin.85
Very Positive
Balance Sheet
The balance sheet is robust with a favorable debt-to-equity ratio, indicating manageable leverage levels. The equity ratio is strong, underscoring a solid foundation of stockholder equity relative to total assets. ROE shows efficient use of equity, although there is potential for further enhancement. Overall, financial stability is well-maintained, but there's a slight caution on asset growth.78
Positive
Cash Flow
RBC Bearings exhibits a positive trend in operating cash flow, with a high operating cash flow to net income ratio, highlighting effective cash generation relative to earnings. Free cash flow growth is commendable, supporting investment and financial flexibility. However, the free cash flow to net income ratio indicates an opportunity to optimize free cash generation against net earnings.82
Very Positive
| Breakdown | |||||
| TTM | Mar 2024 | Jun 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.61B | 1.56B | 1.47B | 942.94M | 608.98M | 727.46M | Gross Profit |
| 675.58M | 670.50M | 604.75M | 357.07M | 234.11M | 289.10M | EBIT |
| 366.57M | 342.20M | 170.97M | 63.70M | 78.75M | 124.60M | EBITDA |
| 483.85M | 459.80M | 409.00M | 185.79M | 144.23M | 181.55M | Net Income Common Stockholders |
| 234.10M | 209.90M | 166.70M | 42.70M | 90.10M | 120.35M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 28.62M | 63.50M | 65.40M | 182.86M | 241.34M | 103.25M | Total Assets |
| 375.95M | 4.68B | 4.69B | 4.85B | 1.43B | 1.32B | Total Debt |
| 38.45M | 1.29B | 1.44B | 1.74B | 51.81M | 52.12M | Net Debt |
| 17.06M | 1.22B | 1.38B | 1.55B | -99.27M | -51.14M | Total Liabilities |
| 92.41M | 1.93B | 2.15B | 2.47B | 204.31M | 203.91M | Stockholders Equity |
| 283.55M | 2.75B | 2.54B | 2.37B | 1.23B | 1.12B |
| Cash Flow | Free Cash Flow | ||||
| 258.80M | 241.50M | 178.60M | 150.53M | 140.68M | 118.32M | Operating Cash Flow |
| 303.90M | 274.70M | 220.60M | 180.29M | 152.45M | 155.62M | Investing Cash Flow |
| -45.10M | -52.20M | -14.00M | -2.85B | -101.52M | -62.78M | Financing Cash Flow |
| -267.80M | -223.50M | -322.80M | 2.70B | -3.36M | -20.37M |
RBC Bearings Technical Analysis
Negative
317.19
Price Trends
345.14
Negative
331.50
Negative
309.01
Positive
Market Momentum
-5.22
Positive
45.68
Neutral
34.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RBC, the sentiment is Negative. The current price of 317.19 is below the 20-day moving average (MA) of 334.86, below the 50-day MA of 345.14, and above the 200-day MA of 309.01, indicating a neutral trend. The MACD of -5.22 indicates Positive momentum. The RSI at 45.68 is Neutral, neither overbought nor oversold. The STOCH value of 34.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RBC.
RBC Bearings Risk Analysis
RBC Bearings disclosed 26 risk factors in its most recent earnings report. RBC Bearings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
RBC Bearings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $24.19B | 9.07 | 24.30% | 1.26% | -2.99% | 159.26% | |
76 Outperform | $37.26B | 27.25 | 14.97% | 0.71% | 5.22% | 4.46% | |
74 Outperform | $72.96B | 21.23 | 110.24% | 2.46% | -1.30% | 20.26% | |
74 Outperform | $78.53B | 25.23 | 25.87% | 1.17% | 0.41% | 19.76% | |
73 Outperform | $10.47B | 46.24 | 8.35% | ― | 4.62% | 21.58% | |
62 Neutral | $8.08B | 13.63 | 3.82% | 3.13% | 3.58% | -14.35% | |
57 Neutral | $9.99B | 34.17 | 3.22% | 5.06% | -2.63% | ― |
* Industrials Sector Average
Performance Comparison
RBC
RBC Bearings
317.19
51.16
19.23%
AME
Ametek
161.49
-19.55
-10.80%
DOV
Dover
162.73
-11.23
-6.46%
ITW
Illinois Tool Works
239.44
-17.36
-6.76%
PH
Parker Hannifin
556.70
-4.09
-0.73%
SWK
Stanley Black & Decker
64.66
-27.34
-29.72%
RBC Bearings Earnings Call Summary
Earnings Call Date: Jan 31, 2025 | % Change Since: -1.50% | Next Earnings Date: May 22, 2025
Earnings Call Sentiment Positive
The earnings call presented a positive outlook with significant growth in the Aerospace and Defense segment and effective debt reduction strategies. Although there were challenges in the OEM and industrial sectors, the overall positive performance metrics and future growth expectations in key segments outweighed these issues.Highlights
Strong Aerospace and Defense Growth
Aerospace and Defense segment sales increased by 10.7% year-over-year, with commercial aerospace up 14.6% and defense up 3%.
Industrial Segment Growth
The industrial segment grew by 2.7% year-over-year, with distribution and aftermarket up 8%.
Gross Margin Expansion
Gross margin for the quarter was $175 million or 44.3% of sales, a 205-basis point increase year-over-year.
Debt Reduction Achievement
The company reduced its debt by $100 million in the quarter, achieving a net leverage of 1.8 turns.
Adjusted EPS Growth
Adjusted EPS grew to $2.34 per share, a 26.5% increase from last year's $1.85.
Strong Free Cash Flow
Free cash flow for the quarter was $74 million, up from $71 million in the previous year.
Positive Outlook for Fiscal 2026
The company is optimistic about future growth in aerospace, defense, and industrial markets.
Lowlights
Decline in OEM Business
The OEM business was down 8.2%, with significant contraction from the oil and gas category.
Capacity Limitations in Defense
Growth in the defense segment was limited by capacity issues, despite high demand.
Challenging Industrial Environment
Headwinds were faced in construction and semiconductor machinery manufacturing sectors.
Company Guidance
During the Fiscal Third Quarter 2025 earnings call for RBC Bearings, the company provided several key metrics and insights regarding their performance and future outlook. The company reported net sales of $394 million, a 5.5% increase from the previous year, with the Aerospace and Defense segment seeing a 10.7% year-over-year growth, driven by a 14.6% rise in commercial aerospace and a 3% increase in defense. The industrial segment grew by 2.7% year-over-year, despite a decline in OEM sales by 8.2%, while distribution and aftermarket sales rose by 8%. Gross margin for the quarter was $175 million, or 44.3% of sales, marking a 205-basis point increase from the previous year. Adjusted net income reached $73 million, a 34.7% increase from the previous year, translating to an adjusted EPS of $2.34, up 26.5%. The company generated $84 million in cash from operations and achieved a free cash flow of $74 million. RBC Bearings also reduced its debt by $100 million during the quarter, bringing the trailing net leverage to 1.8 turns. Looking ahead, the company forecasts revenues between $434 million to $444 million for the fourth quarter, representing a 4.9% to 7.3% year-over-year growth, with gross margins projected to be between 44% to 44.5%.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.