Rockwell Automation (ROK) AI Stock Analysis

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Rockwell Automation

(NYSE:ROK)

Rating:68Neutral

Price Target:

$336.00

▲(4.87%Upside)

Rockwell Automation's stock is moderately attractive, with strong profitability and cash flow generation supporting its operations. However, the high P/E ratio and overbought technical indicators suggest caution. Challenges from revenue declines and external uncertainties such as tariffs are balanced by positive margin improvements and strategic growth areas.

Positive Factors

Cost Management

ROK recently revised estimated tariff cost headwinds this year to $70M from $125M, indicating a reduction in expected costs.

Market Positioning

ROK is well positioned in a stronger US investment environment given its leading market share.

Negative Factors

Growth Concerns

There are still growth concerns and the macro environment remains uncertain.

Project Delays

Larger projects in the pipeline are being delayed as customers evaluate tariff impacts.

Rockwell Automation (ROK) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$36.55B

Dividend Yield1.62%

Average Volume (3M)975.52K

Price to Earnings (P/E)40.8

Beta (1Y)1.03

Revenue Growth-11.19%

EPS Growth-22.50%

CountryUS

Employees27,000

SectorIndustrials

Sector Strength85

IndustryIndustrial - Machinery

Share Statistics

EPS (TTM)2.45

Shares Outstanding112,716,470

10 Day Avg. Volume846,012

30 Day Avg. Volume975,522

Financial Highlights & Ratios

PEG Ratio-0.86

Price to Book (P/B)9.15

Price to Sales (P/S)0.00

P/FCF Ratio36.56

Enterprise Value/Market Cap0.78

Enterprise Value/Revenue0.86

Enterprise Value/Gross Profit9.15

Enterprise Value/Ebitda4.45

Forecast

1Y Price Target

$327.62

Price Target Upside2.25% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering13

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 products and services, which are primarily focused on industrial automation and digital transformation solutions. The company's key revenue streams include hardware such as programmable logic controllers (PLCs), human-machine interfaces (HMIs), and sensors, as well as software solutions for industrial automation, analytics, and data management. Additionally, Rockwell offers services like consulting, system integration, and maintenance, which provide recurring revenue opportunities. Strategic partnerships and collaborations with other technology providers and industrial companies also contribute to its earnings, allowing Rockwell to expand its market reach and enhance its product offerings.

Rockwell Automation Key Performance Indicators (KPIs)

Any

Operating Earnings by Segment

Operating Earnings by Segment
Shows earnings from different business segments, providing insight into which areas are most profitable and how effectively resources are allocated.

Chart InsightsRockwell Automation's Software and Control segment shows robust margin improvement, driven by cost reduction and margin expansion, despite flat sales. However, Intelligent Devices and Lifecycle Services face challenges with declining sales due to trade and policy uncertainties. The company is focusing on structural productivity and margin expansion, aiming for significant cost savings. Despite a mixed performance, the overall outlook includes a positive trajectory for eCommerce and Warehouse Automation, with expected growth of 45% in fiscal 2025, counterbalancing some of the segment-specific declines.

Data provided by:

Main Street Data

Rockwell Automation Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q2-2025)

% Change Since: 27.16%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a mixed sentiment with strong margin improvements and positive growth in specific segments like eCommerce and Warehouse Automation, but also challenges in Intelligent Devices, Lifecycle Services, and Automotive due to tariffs and policy uncertainty.

Q2-2025 Updates

Positive Updates

Strong Margin Improvement

Segment operating margin of 20.4% compared to 19% a year ago, driven by strong execution across the company. Adjusted EPS of $2.45 was above expectations, primarily due to the beat on segment operating margin.

Robust Performance in Software and Control

Software and Control margin of 30.1% was up 440 basis points versus prior year even though sales were flat year-over-year. Higher margin was driven by cost reduction and margin expansion actions.

Positive Outlook for eCommerce and Warehouse Automation

Sales in eCommerce and Warehouse Automation grew over 45% versus prior year and were significantly above expectations. Expected to grow 45% in fiscal year 2025.

Successful Cost Reduction and Margin Expansion

Realized about $155 million of savings in the first half, expected to exceed the full-year target of $250 million in year-over-year structural productivity.

Negative Updates

Decline in Intelligent Devices and Lifecycle Services

Intelligent Devices organic sales declined 6% year-over-year. Lifecycle Services organic sales decreased 6% year-over-year and were a bit lower than expected due to trade and policy uncertainty.

Challenges in Automotive and Process Verticals

Automotive sales continued to be challenged by ongoing tariff and policy uncertainty. Process industries saw year-over-year softness due to difficult comparisons in Energy business.

Impact of Tariffs and Uncertainty

Tariffs expected to result in a $125 million cost exposure for the second half of fiscal 2025. Uncertainty remains due to the magnitude of pricing to offset new tariffs and timing of CapEx investments by customers.

Company Guidance

During Rockwell Automation's second-quarter fiscal 2025 earnings call, the company provided a comprehensive update on its performance and guidance. The company reported a segment operating margin of 20.4% and adjusted EPS of $2.45, both exceeding expectations. Organic sales were down 4% year-over-year, with reported sales decreasing by 6%, influenced by a 2-point negative currency impact. Despite these declines, the company highlighted sequential growth in customer demand, with a book-to-bill ratio of about 1.0, indicating a balanced order intake. The company's fiscal 2025 outlook includes maintaining an organic sales growth range of positive 2% to negative 4%, with annual recurring revenue expected to grow by 10%. The adjusted EPS guidance was raised to approximately $9.70 at the midpoint, with a full-year segment margin target increased to 20%. Rockwell continues to focus on cost reduction and margin expansion, aiming for a full-year structural productivity target exceeding $250 million. The company remains vigilant in managing uncertainties related to tariffs, pricing, and capital expenditures, with a projected $125 million tariff cost exposure for the second half of fiscal 2025.

Rockwell Automation Financial Statement Overview

Summary

Rockwell Automation demonstrates strong profitability and cash flow generation, though there is a noted decline in revenue. The balance sheet shows manageable leverage with solid returns on equity, suggesting financial stability and effective asset management. The company is well-positioned to support its operations and growth strategies, although keeping an eye on revenue trends is crucial.

Income Statement

Positive

The company exhibits strong profitability with a gross profit margin of 39.2% and a net profit margin of 11.4% for TTM (Trailing-Twelve-Months). However, the revenue has decreased by 12% from the previous annual period. The EBIT and EBITDA margins are healthy at 15.6% and 19.8%, respectively, indicating efficient operations despite the revenue decline.

Balance Sheet

Positive

The balance sheet reflects a moderate debt-to-equity ratio of 1.19, showing manageable leverage. The return on equity (ROE) stands at 26.4% for TTM, highlighting excellent shareholder returns. An equity ratio of 31.3% indicates a solid asset backing, though there's room for improvement in equity funding.

Cash Flow

Positive

The company boasts a robust free cash flow growth rate of 67.4% from the previous annual period, indicating strong cash generation. The operating cash flow to net income ratio of 1.4 and free cash flow to net income ratio of 1.18 suggest efficient cash conversion and a healthy liquidity position.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
7.97B	8.26B	9.06B	7.76B	7.00B	6.33B
	Gross Profit
3.12B	3.19B	3.72B	3.10B	2.90B	2.60B
	EBIT
1.24B	830.60M	1.62B	1.33B	1.22B	1.09B
	EBITDA
1.58B	1.57B	1.99B	1.43B	1.81B	1.41B
	Net Income Common Stockholders
907.10M	952.50M	1.39B	919.10M	1.34B	1.02B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
450.00M	471.30M	1.08B	490.70M	662.20M	704.60M
	Total Assets
10.99B	11.23B	11.30B	10.76B	10.70B	7.26B
	Total Debt
4.09B	4.09B	3.33B	4.10B	4.29B	2.27B
	Net Debt
3.64B	3.62B	2.26B	3.61B	3.63B	1.57B
	Total Liabilities
7.39B	7.56B	7.56B	7.74B	8.01B	6.24B
	Stockholders Equity
3.44B	3.50B	3.56B	2.73B	2.39B	708.80M
Cash Flow		Free Cash Flow
1.07B	639.10M	1.21B	682.00M	1.14B	1.01B
	Operating Cash Flow
1.27B	863.80M	1.37B	823.10M	1.26B	1.12B
	Investing Cash Flow
-228.20M	-982.50M	854.30M	-7.80M	-2.63B	-618.00M
	Financing Cash Flow
-1.06B	-502.80M	-1.68B	-934.20M	1.30B	-798.90M

Rockwell Automation Technical Analysis

Technical Analysis Sentiment

Positive

Last Price320.41

Price Trends

50DMA

280.83

Positive

100DMA

277.03

Positive

200DMA

275.59

Positive

Market Momentum

MACD

10.42

Positive

RSI

64.19

Neutral

STOCH

38.94

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ROK, the sentiment is Positive. The current price of 320.41 is above the 20-day moving average (MA) of 316.88, above the 50-day MA of 280.83, and above the 200-day MA of 275.59, indicating a bullish trend. The MACD of 10.42 indicates Positive momentum. The RSI at 64.19 is Neutral, neither overbought nor oversold. The STOCH value of 38.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ETN	80 Outperform	$132.26B	34.12	20.84%	1.23%	7.00%	16.84%
ITW	77 Outperform	$71.62B	21.52	107.62%	2.45%	-1.85%	12.04%
PH	76 Outperform	$84.57B	25.47	27.16%	1.09%	-0.23%	22.41%
ROP	74 Outperform	$60.82B	40.80	8.09%	0.58%	13.34%	1.98%
EMR	73 Outperform	$72.38B	30.71	9.82%	1.64%	6.49%	24.14%
ROK	68 Neutral	$36.55B	40.83	25.86%	1.62%	-11.19%	-22.50%
Sector *	66 Neutral	$4.49B	12.22	5.40%	3.71%	4.17%	-11.97%

* Industrials Sector Average

Performance Comparison

ROK

Rockwell Automation

320.41

64.78

25.34%

ETN

Eaton

330.51

7.25

2.24%

EMR

Emerson Electric Company

127.37

20.60

19.29%

ITW

Illinois Tool Works

241.18

6.30

2.68%

Parker Hannifin

652.21

150.57

30.02%

ROP

Roper Technologies

562.58

5.70

1.02%

Rockwell Automation Corporate Events

Business Operations and StrategyRegulatory Filings and Compliance

Rockwell Automation CEO Initiates Trading Plan

Neutral

Jun 4, 2025

On May 30, 2025, Blake D. Moret, CEO of Rockwell Automation, initiated a Rule 10b5-1 trading plan to manage shares of restricted stock units and performance shares vesting in December 2025. This plan is part of his tax and financial strategy to cover taxes and diversify options expiring in 2026.

The most recent analyst rating on (ROK) stock is a Sell with a $290.00 price target. To see the full list of analyst forecasts on Rockwell Automation stock, see the ROK Stock Forecast page.

Private Placements and Financing

Rockwell Automation Secures $500 Million Term Loan

Neutral

May 19, 2025

On May 16, 2025, Rockwell Automation, Inc. entered into a $500 million senior unsecured 364-day term loan credit agreement with several banks, including Bank of America and Wells Fargo. This agreement, which matures by May 15, 2026, will support general corporate purposes and complements Rockwell’s existing $1.5 billion five-year credit agreement. The new credit facility includes customary covenants and conditions, such as restrictions on certain financial activities and a requirement to maintain a specific EBITDA to interest expense ratio. The agreement allows for potential acceleration of indebtedness under certain conditions, but does not restrict dividend payments.

The most recent analyst rating on (ROK) stock is a Hold with a $256.00 price target. To see the full list of analyst forecasts on Rockwell Automation stock, see the ROK Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.