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RBC Bearings (RBC)
NYSE:RBC

RBC Bearings (RBC) AI Stock Analysis

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RBC Bearings

(NYSE:RBC)

Rating:77Outperform
Price Target:
$408.00
▲(7.91%Upside)
RBC Bearings scores well overall due to strong financial performance and strategic corporate actions. While technical indicators suggest bullish momentum, valuation remains a concern with a high P/E ratio. Nonetheless, the company's positive earnings outlook and strategic acquisition plans support a favorable stock assessment.
Positive Factors
Contract Quality
RBC's renegotiated contracts with Boeing and ongoing discussions with Airbus highlight upgraded contract quality and potential content wins in the aerospace sector.
Debt Management
RBC has de-levered to ~1.7x net debt to EBITDA, with expectations for further reduction.
M&A Strategy
The acquisition of VACCO is seen as a strategic move to create attractive opportunities, such as expanding the company's presence on naval defense platforms and within the commercial space market.
Negative Factors
Acquisition Impact
VACCO's current profitability is uncertain and noted to be highly dilutive to its segment's adjusted EBITDA margins, representing a drag on RBC's company level.
Operating Cash Flow
RBC reported operating cash flow of $69mn, below consensus of $160mn and below MSe of $117mn.

RBC Bearings (RBC) vs. SPDR S&P 500 ETF (SPY)

RBC Bearings Business Overview & Revenue Model

Company DescriptionRBC Bearings (RBC) is a leading international manufacturer and marketer of highly engineered precision bearings and essential components. Serving a range of sectors including aerospace, defense, industrial, and commercial markets, RBC's core products include plain, roller, and ball bearings, as well as highly specialized components. The company is recognized for its commitment to quality, innovation, and customer-centric solutions that enhance performance and reliability across various applications.
How the Company Makes MoneyRBC Bearings generates revenue through the manufacturing and sale of its precision bearings and components, which are integral to the function of a broad spectrum of machinery and equipment. The company's key revenue streams include sales to original equipment manufacturers (OEMs) and aftermarket clients across diverse industries such as aerospace, defense, and industrial machinery. RBC's strategic partnerships and long-term contracts with leading industry players also significantly contribute to its earnings. By focusing on high-performance products and maintaining strong relationships with its clients, RBC is able to secure a stable revenue base in both domestic and international markets.

RBC Bearings Earnings Call Summary

Earnings Call Date:May 16, 2025
(Q4-2025)
|
% Change Since: 2.95%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with strong revenue growth, improved margins, and successful debt reduction efforts. However, there were challenges such as industrial segment contraction and macroeconomic headwinds. The company's guidance for fiscal 2026 remains optimistic, particularly in the A&D segment.
Q4-2025 Updates
Positive Updates
Strong Revenue Growth
Fourth quarter sales reached $438 million, representing a 5.8% increase over the previous year. The A&D segment saw a 10.6% year-over-year increase, with commercial aerospace growing 11.6% and defense growing 8.2%.
Improved Gross Margin
Consolidated gross margin for the quarter was 44.2%, up from 43.1% the previous year. Industrial gross margins were 45.7%, and A&D margins were 41.5%.
Significant EPS Growth
Adjusted diluted EPS increased to $2.83, a 14.6% rise from the previous year's $2.47.
Debt Reduction Success
The company allocated $275 million to debt repayment in fiscal 2025, reducing trailing net leverage to 1.7 turns.
Positive Outlook for Fiscal 2026
The company expects at least 15% growth in commercial aerospace and mid-to-high single-digit growth in defense for fiscal 2026.
Negative Updates
Challenges in Industrial Segment
Despite a 3.3% growth in the industrial segment, the broader industrial economy has seen two consecutive years of contraction.
Free Cash Flow Decline
Free cash flow in the quarter was $55 million, with a conversion rate of 76%, compared to $70 million and 113% conversion last year.
Macroeconomic and Supply Chain Challenges
The company faced challenges such as FAA production constraints, a prolonged strike at its largest customer, and macroeconomic softness in the industrial economy.
Company Guidance
During RBC Bearings' fiscal fourth-quarter 2025 earnings call, the company reported strong financial performance, with sales reaching $438 million, a 5.8% increase year-over-year. The consolidated gross margin improved to 44.2% from 43.1% the previous year, and adjusted diluted EPS rose 14.6% to $2.83 per share. The Aerospace and Defense (A&D) segment saw a significant sales increase of 10.6%, with commercial aerospace growing by 11.6% and defense by 8.2%. The industrial segment also experienced growth, with a 3.3% year-over-year increase. RBC Bearings achieved an adjusted EBITDA of $139.8 million and an adjusted EBITDA margin of 31.9%, reflecting a 50-basis-point improvement from the previous year. The company reduced its net leverage to 1.7 turns by allocating $275 million to debt repayment throughout fiscal 2025, positioning it well for potential mergers and acquisitions. Looking ahead to fiscal 2026, RBC Bearings anticipates at least 15% growth in commercial aerospace and mid-to-high single-digit growth in defense, while projecting revenues between $424 million and $434 million for the first quarter.

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
85
Very Positive
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.
Balance Sheet
78
Positive
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.
Cash Flow
82
Very Positive
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.
Breakdown
TTMMar 2024Jun 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
1.61B1.56B1.47B942.94M608.98M727.46M
Gross Profit
675.58M670.50M604.75M357.07M234.11M289.10M
EBIT
366.57M342.20M170.97M63.70M78.75M124.60M
EBITDA
483.85M459.80M409.00M185.79M144.23M181.55M
Net Income Common Stockholders
235.10M209.90M166.70M42.70M90.10M120.35M
Balance SheetCash, Cash Equivalents and Short-Term Investments
60.60M63.50M65.40M182.86M241.34M103.25M
Total Assets
4.67B4.68B4.69B4.85B1.43B1.32B
Total Debt
1.05B1.29B1.44B1.74B51.81M52.12M
Net Debt
993.80M1.22B1.38B1.55B-99.27M-51.14M
Total Liabilities
1.73B1.93B2.15B2.47B204.31M203.91M
Stockholders Equity
2.94B2.75B2.54B2.37B1.23B1.12B
Cash FlowFree Cash Flow
258.80M241.50M178.60M150.53M140.68M118.32M
Operating Cash Flow
303.90M274.70M220.60M180.29M152.45M155.62M
Investing Cash Flow
-45.10M-52.20M-14.00M-2.85B-101.52M-62.78M
Financing Cash Flow
-267.80M-223.50M-322.80M2.70B-3.36M-20.37M

RBC Bearings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price378.09
Price Trends
50DMA
343.18
Positive
100DMA
342.93
Positive
200DMA
322.74
Positive
Market Momentum
MACD
8.58
Negative
RSI
66.82
Neutral
STOCH
90.00
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RBC, the sentiment is Positive. The current price of 378.09 is above the 20-day moving average (MA) of 366.74, above the 50-day MA of 343.18, and above the 200-day MA of 322.74, indicating a bullish trend. The MACD of 8.58 indicates Negative momentum. The RSI at 66.82 is Neutral, neither overbought nor oversold. The STOCH value of 90.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RBC.

RBC Bearings Risk Analysis

RBC Bearings disclosed 10 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 (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
RBRBC
77
Outperform
$11.79B49.148.51%4.87%19.66%
77
Outperform
$10.86B24.0134.83%1.49%-2.29%-14.49%
SNSNA
75
Outperform
$16.74B16.6919.15%2.59%-0.88%0.04%
TKTKR
74
Outperform
$4.94B15.2311.85%1.94%-3.69%-11.76%
KMKMT
71
Outperform
$1.64B15.558.69%3.72%-2.93%2.74%
66
Neutral
$4.49B12.285.32%248.53%4.08%-12.00%
SWSWK
65
Neutral
$9.95B27.314.03%4.98%-3.04%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
RBC
RBC Bearings
378.09
98.17
35.07%
KMT
Kennametal
21.81
-1.93
-8.13%
LECO
Lincoln Electric Holdings
198.73
14.21
7.70%
SNA
Snap-on
319.02
57.61
22.04%
SWK
Stanley Black & Decker
65.45
-13.78
-17.39%
TKR
Timken Company
70.75
-11.35
-13.82%

RBC Bearings Corporate Events

M&A TransactionsBusiness Operations and Strategy
RBC Bearings to Acquire VACCO Industries for $310M
Positive
May 20, 2025

RBC Bearings Incorporated has announced a definitive agreement to acquire VACCO Industries from ESCO Technologies for $310 million in cash. VACCO, based in South El Monte, California, specializes in manufacturing valves, manifolds, regulators, filters, and other precision components for space and naval defense applications. The acquisition, expected to close in the summer of 2025 pending regulatory approval, will be financed through RBC’s existing credit agreement and cash on hand. This strategic move aims to expand RBC’s product breadth and capacity in its rapidly growing space and naval defense channels, enhancing its design, engineering, and manufacturing capabilities to better serve customer needs.

The most recent analyst rating on (RBC) stock is a Hold with a $276.00 price target. To see the full list of analyst forecasts on RBC Bearings stock, see the RBC Stock Forecast page.

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.