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Rockwell Automation (ROK)
:ROK
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Rockwell Automation
(NYSE:ROK)
67Neutral
Positive Factors
Demand and Orders
Orders increased by 10% year-over-year and showed sequential growth across all regions and business segments, providing ROK additional backlog for the balance of the fiscal year.
Financial Performance
ROK earnings beat expectations on stronger margin performance as structural cost actions begin to bear fruit.
Market Position
As the US Factory Automation leader, ROK is driven by US Manufacturing Capital Expenditure, which is believed to be returning to growth after 25 years of stagnation.
Negative Factors
Market Challenges
Trends in core markets remain challenging.
Revenue Trends
Two year stack revenue trends for all 3 segments are expected to continue deteriorating through the end of FY25.
Segment Performance
Margins contracted in the Intelligent Devices segment by 130 basis points to 14.9%.
Rockwell Automation (ROK) vs. S&P 500 (SPY)
Market Cap
$28.09B
Dividend Yield2.06%
Average Volume (3M)1.10M
Price to Earnings (P/E)30.9
Beta (1Y)1.08
Revenue Growth-11.28%
EPS Growth-23.69%
CountryUS
Employees27,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)8.04
Shares Outstanding113,072,945
10 Day Avg. Volume1,027,446
30 Day Avg. Volume1,101,248
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.62
Price to Cash Flow (P/CF)20.10
P/FCF Ratio20.10
Enterprise Value/Market Cap1.29
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit11.32
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$281.13Price Target Upside13.19% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Rockwell Automation Business Overview & Revenue Model
Company DescriptionRockwell Automation, Inc. provides industrial automation and digital transformation solutions in the United States and internationally. The company operates in three segments, Intelligent Devices, Software & Control, and Lifecycle Services. Its solutions include hardware and software products, and services. The Intelligent Devices segment offers drives, motion, safety, sensing, industrial components, and configured-to-order products. The Software & Control segment provides control and visualization software and hardware, information software, digital twin and simulation software, and network and security infrastructure solutions. The Lifecycle Services segment provides consulting, professional services and solutions, and connected and maintenance services. The company sells its solutions primarily through independent distributors in relation with its direct sales force. It serves discrete end markets, including automotive, semiconductor, warehousing and logistics, and other discrete markets, as well as general industries comprising printing and publishing, marine, glass, fiber and textiles, airports, and aerospace; hybrid end markets, such as food and beverage, life sciences, household and personal care, and tire, as well as eco industrial, including water/wastewater, waste management, mass transit, and renewable energy; and process end markets comprising oil and gas, mining, metals, chemicals, pulp and paper, and others. Rockwell Automation, Inc. was founded in 1903 and is headquartered in Milwaukee, Wisconsin.
How the Company Makes MoneyRockwell Automation generates revenue through the sale of its industrial automation and information technology products and services. The company's revenue model is primarily based on two key streams: product sales and service contracts. Product sales encompass hardware such as programmable logic controllers (PLCs), human-machine interfaces (HMIs), and sensors, as well as software solutions for data analytics and process optimization. Additionally, Rockwell Automation offers consulting, maintenance, and support services that provide recurring revenue through service contracts. Strategic partnerships and collaborations with other technology firms and industrial companies further enhance its market reach and capability to deliver comprehensive automation solutions. Factors such as ongoing technological innovation, the global push for digital transformation, and the increasing need for smart manufacturing solutions also contribute significantly to the company's earnings.
Rockwell Automation Key Performance Indicators (KPIs)
Any
Operating Earnings by Segment
Breaks down operating earnings across different business segments, providing insight into which areas are most profitable and where the company might focus for growth or improvement.
Breaks down operating earnings across different business segments, providing insight into which areas are most profitable and where the company might focus for growth or improvement.
Data provided by:
Main Street Data
Main Street DataRockwell Automation Financial Statement Overview
Summary
Rockwell Automation demonstrates financial stability with effective cost management and strong cash flows. Despite facing declining revenue and net income growth, the company maintains a strong cash position and manageable leverage, positioning it well for future opportunities.Income Statement
Rockwell Automation shows a stable income statement with a consistent gross profit margin and an improving EBIT margin, reflecting effective cost management. However, the company faces challenges with declining net income and revenue growth, indicating potential market or operational challenges.75
Positive
Balance Sheet
The balance sheet reveals a moderate debt-to-equity ratio, suggesting manageable leverage. The company maintains a stable equity ratio, but the return on equity has shown signs of decline, indicating efficiency in using equity is a concern.70
Positive
Cash Flow
Cash flow analysis is strong with healthy operating cash flow relative to net income, showing effective cash management. The free cash flow growth rate is positive, and the company maintains a solid free cash flow to net income ratio.80
Positive
| Breakdown | ||||
| Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 8.26B | 9.06B | 7.76B | 7.00B | 6.33B | Gross Profit |
| 3.19B | 3.72B | 3.10B | 2.90B | 2.60B | EBIT |
| 830.60M | 1.62B | 1.33B | 1.22B | 1.09B | EBITDA |
| 1.57B | 1.99B | 1.43B | 1.81B | 1.41B | Net Income Common Stockholders |
| 952.50M | 1.39B | 919.10M | 1.34B | 1.02B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 471.30M | 1.08B | 490.70M | 662.20M | 704.60M | Total Assets |
| 11.23B | 11.30B | 10.76B | 10.70B | 7.26B | Total Debt |
| 4.09B | 3.33B | 4.10B | 4.29B | 2.27B | Net Debt |
| 3.62B | 2.26B | 3.61B | 3.63B | 1.57B | Total Liabilities |
| 7.56B | 7.56B | 7.74B | 8.01B | 6.24B | Stockholders Equity |
| 3.50B | 3.56B | 2.73B | 2.39B | 708.80M |
| Cash Flow | Free Cash Flow | |||
| 639.10M | 1.21B | 682.00M | 1.14B | 1.01B | Operating Cash Flow |
| 863.80M | 1.37B | 823.10M | 1.26B | 1.12B | Investing Cash Flow |
| -982.50M | 854.30M | -7.80M | -2.63B | -618.00M | Financing Cash Flow |
| -502.80M | -1.68B | -934.20M | 1.30B | -798.90M |
Rockwell Automation Technical Analysis
Neutral
248.38
Price Trends
261.25
Negative
273.43
Negative
270.17
Negative
Market Momentum
-5.58
Negative
52.12
Neutral
84.02
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ROK, the sentiment is Neutral. The current price of 248.38 is above the 20-day moving average (MA) of 238.82, below the 50-day MA of 261.25, and below the 200-day MA of 270.17, indicating a neutral trend. The MACD of -5.58 indicates Negative momentum. The RSI at 52.12 is Neutral, neither overbought nor oversold. The STOCH value of 84.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ROK.
Rockwell Automation Risk Analysis
Rockwell Automation disclosed 19 risk factors in its most recent earnings report. Rockwell Automation reported the most risks in the “Macro & Political” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Rockwell Automation Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $59.89B | 39.01 | 8.53% | 0.55% | 13.94% | 13.02% | |
76 Outperform | $113.15B | 30.40 | 20.23% | 1.34% | 7.25% | 18.36% | |
74 Outperform | $70.26B | 20.45 | 110.24% | 2.46% | -1.30% | 20.26% | |
70 Outperform | $59.37B | 25.04 | 9.66% | 2.00% | 10.29% | 22.72% | |
67 Neutral | $28.09B | 30.91 | 26.22% | 2.06% | -11.28% | -23.69% | |
66 Neutral | $77.00B | 24.69 | 25.87% | 1.09% | 0.41% | 19.76% | |
63 Neutral | $4.27B | 11.40 | 5.38% | 214.63% | 4.11% | -8.98% |
* Industrials Sector Average
Performance Comparison
ROK
Rockwell Automation
248.38
-26.45
-9.62%
ETN
Eaton
288.82
-33.53
-10.40%
EMR
Emerson Electric Company
105.28
-2.53
-2.35%
ITW
Illinois Tool Works
239.50
-3.92
-1.61%
PH
Parker Hannifin
598.02
49.34
8.99%
ROP
Roper Technologies
557.70
47.07
9.22%
Rockwell Automation Earnings Call Summary
Earnings Call Date:Feb 10, 2025
(Q1-2025)
| % Change Since: -7.04%|
Next Earnings Date:May 07, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong order growth and backlog, successful cost reduction initiatives, and notable wins in international projects, particularly in software and e-commerce segments. However, these positives were balanced by significant sales declines, regional weaknesses, and challenges in key sectors like automotive and semiconductor, alongside currency headwinds.Q1-2025 Updates
Positive Updates
Order Growth and Backlog
Q1 orders grew 10% year over year with mid-single digits sequential growth. Orders exceeded shipments, adding to the backlog for the year.
Segment and Product Performance
Lifecycle services organic sales were up 5% year over year. Total ARR grew 11%, led by strong growth in software offerings.
Cost Reduction and Productivity
Achieved $70 million in productivity benefits in Q1 as part of a $250 million year-over-year plan. Adjusted EPS was $1.83, above expectations.
E-commerce and Warehouse Automation
Sales grew over 30% year over year, driven by facility modernization and optimization in North America and Europe.
Strong International Project Wins
Notable wins with companies like Morocco and Thermo Fisher, showcasing the breadth and capability of Rockwell Automation's offerings.
Negative Updates
Sales Decline
Q1 sales declined 8.5% year over year, affected by currency headwinds and a difficult comparison with prior year backlogs.
Regional Sales Weakness
EMEA sales were down 14% and Asia Pacific sales declined 9%, with a double-digit decrease in China.
Challenges in Automotive and Semiconductor
Discrete sales were down mid-single digits year over year, with automotive and semiconductor sales impacted by delays.
Currency Impact
Currency had a negative impact of 90 basis points on reported sales, affecting overall financial performance.
Company Guidance
During the Rockwell Automation, Inc. quarterly conference call, the company provided guidance for fiscal 2025, emphasizing plans to achieve $250 million in productivity benefits despite temporary challenges like currency impacts. The company anticipates organic sales growth between -4% and 2%, with reported sales projected at $8.1 billion, factoring in a 1.5-point negative currency translation. Segment margin is expected to remain around 19%, with adjusted EPS reaffirmed at $9.20 at the midpoint. The company also highlighted a 10% year-over-year increase in Q1 orders, led by Logix controllers and IO, and a total ARR growth of 11%, primarily driven by software offerings. Additionally, Rockwell Automation, Inc. expects free cash flow conversion of 100% for fiscal year 2025.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.