Regal Rexnord (RRX) AI Stock Analysis

• Market Cap: $9.73B
• Dividend Yield: 0.95%
• Average Volume (3M): 593.07K
• Price to Earnings (P/E): 41.8
• Beta (1Y): 1.25
• Revenue Growth: -10.19%
• EPS Growth: N/A
• Country: US
• Employees: 30,000
• Sector: Industrials
• Sector Strength: 87
• Industry: Industrial - Machinery
• EPS (TTM): 2.15
• Shares Outstanding: 66,335,570
• 10 Day Avg. Volume: 687,262
• 30 Day Avg. Volume: 593,065
• PEG Ratio: 2.04
• Price to Book (P/B): 1.53
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.35
• Enterprise Value/Market Cap: 0.45
• Enterprise Value/Revenue: 0.18
• Enterprise Value/Gross Profit: 2.03
• Enterprise Value/Ebitda: 0.94
• 1Y Price Target: $170.88
• Price Target Upside: 12.59% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 72 Outperform
• Price Target: $151.00 ▼(-0.51%Downside)

Regal Rexnord's overall stock score is driven by strong earnings call performance and technical analysis, indicating positive market momentum. While financial performance is stable, the high valuation and modest dividend yield present some concerns. The company's optimistic outlook in key growth areas, despite external challenges, supports a favorable score.

Positive Factors

Growth and Margins

The improved portfolio with an enhanced growth/margin profile indicates potential for outperformance regardless of the cyclical backdrop.

Market Recovery

There is a clearer path for the stock to work from here as estimates reacceleration with an end market recovery.

Order Growth

Daily order growth inflected positive for the first time since 2Q22, aided by easier comps.

Negative Factors

Revenue Pressure

RRX missed 3Q operationally and 2024 guidance was reset lower due to incremental revenue pressure.

Sales Growth Outlook

Management sees limited organic sales growth in 2025, with ongoing demand headwinds.

Regal Rexnord Business Overview & Revenue Model

Company Description

Regal Rexnord Corporation, together with its subsidiaries, designs, manufactures, and sells industrial powertrain solutions, power transmission components, electric motors and electronic controls, air moving products, and specialty electrical components and systems worldwide. It operates through four segments: Commercial Systems, Industrial Systems, Climate Solutions, and Motion Control Solutions. The Commercial Systems segment provides AC and DC motors, electronic variable speed controls, fans, blowers, and precision stator and rotor kits. The Industrial Systems segment offers AC motors for industrial applications; electric alternators for prime and standby power applications to data centers, distributed energy, microgrid, rental marine, agriculture, healthcare, mobile, and defense markets; and switchgear for healthcare, government, and waste water applications, as well as residential, commercial, and industrial applications. The Climate Solutions segment provides fractional motors, electronic variable speed controls, and blowers for use in a residential and light commercial air moving applications; and fractional horsepower motors and blowers for white goods, water heating equipment, small pumps, compressors, and fans. The Motion Control Solutions segment offers bearings; conveyors; disc, gear, grid, elastomeric, and torsionally soft couplings; mechanical power transmission drives and components; worm gearing, shaft configuration, helical, bevel, helical bevel, worm, hypoid, and spur gearing products; and aerospace components. This segment serves beverage, bulk handling, metal, special machinery, energy, and aerospace and general industrial markets. The company sells its products directly to original equipment manufacturers and end-users through a network of direct and independent sales representatives, and distributors. The company was formerly known as Regal Beloit Corporation. The company was founded in 1955 and is headquartered in Beloit, Wisconsin.

How the Company Makes Money

Regal Rexnord makes money primarily through the production and sale of its diverse range of industrial products and systems. The company's revenue streams are largely driven by its sales of electric motors, power transmission solutions, and automation products to industrial and commercial customers. It also generates income through service offerings such as maintenance and repair solutions. Key partnerships with distributors and direct sales to large industrial clients are significant factors contributing to its revenue. Regal Rexnord's focus on innovation and efficiency in its products helps maintain its competitive position in the market, contributing to its financial performance.

Regal Rexnord Financial Statement Overview

Summary

Overall, Regal Rexnord exhibits a stable financial position with solid profitability margins and efficient cash flow generation. While revenue has slightly declined, the company maintains a strong equity base and effective leverage management. Continued focus on revenue growth and improving net profit margins could enhance future performance.

Income Statement

Regal Rexnord's income statement for the TTM shows a gross profit margin of 36.63%, which is a healthy level for the industry. The net profit margin stands at 3.96%, indicating profitability but with room for improvement. The EBIT margin of 10.89% and EBITDA margin of 20.09% reflect solid operational efficiency. However, the revenue growth rate compared to the previous year is negative 2.15%, indicating a slight decline in revenue.

Balance Sheet

The company's balance sheet highlights a debt-to-equity ratio of 0.85, suggesting a moderate level of leverage. The return on equity (ROE) is 3.64%, which points to modest efficiency in generating profits from shareholders' equity. An equity ratio of 45.76% indicates a strong equity base relative to total assets, providing a stable financial structure.

Cash Flow

Regal Rexnord's cash flow analysis reveals a positive free cash flow growth rate of 4.18%. The operating cash flow to net income ratio is 2.69, suggesting robust cash generation relative to net income. The free cash flow to net income ratio is 2.23, indicating strong free cash flow relative to net income, which is favorable for sustaining operations and funding growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Mar 2022	Mar 2021
Income Statement
Total Revenue	5.90B	6.03B	6.25B	5.22B	3.81B	2.91B
Gross Profit	2.16B	2.19B	2.11B	1.67B	1.09B	808.70M
EBITDA	1.19B	630.00M	971.00M	1.04B	573.00M	447.20M
Net Income	233.70M	196.20M	-57.40M	488.90M	229.60M	187.70M
Balance Sheet
Total Assets	14.03B	14.03B	15.43B	10.27B	10.28B	4.59B
Cash, Cash Equivalents and Short-Term Investments	305.30M	393.50M	574.00M	688.50M	672.80M	611.30M
Total Debt	5.45B	5.61B	6.55B	2.02B	1.92B	1.07B
Total Liabilities	7.60B	7.77B	9.07B	3.85B	3.93B	2.01B
Stockholders Equity	6.42B	6.26B	6.34B	6.39B	6.31B	2.54B
Cash Flow
Free Cash Flow	520.80M	499.90M	596.20M	352.40M	303.20M	387.90M
Operating Cash Flow	628.60M	609.40M	715.30M	436.20M	357.70M	435.40M
Investing Cash Flow	289.40M	275.40M	-4.98B	-113.30M	-175.70M	-37.00M
Financing Cash Flow	-1.12B	-1.10B	4.20B	-274.20M	-117.60M	-147.60M

Regal Rexnord Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 151.77
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RRX, the sentiment is Positive. The current price of 151.77 is above the 20-day moving average (MA) of 142.27, above the 50-day MA of 132.74, and above the 200-day MA of 145.25, indicating a bullish trend. The MACD of 3.97 indicates Negative momentum. The RSI at 68.54 is Neutral, neither overbought nor oversold. The STOCH value of 80.49 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RRX.

Regal Rexnord Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SPXC	78 Outperform	$7.89B	39.89	15.24%	―	10.78%	30.05%
DCI	77 Outperform	$8.23B	23.73	24.58%	1.70%	3.26%	-7.70%
FLS	74 Outperform	$6.84B	24.54	14.00%	1.60%	4.23%	20.40%
MIDD	74 Outperform	$7.88B	18.63	12.33%	―	-2.56%	11.51%
RRX	72 Outperform	$9.73B	41.79	3.69%	0.95%	-10.19%	―
GNRC	64 Neutral	$8.66B	26.23	14.29%	―	8.07%	58.67%
Sector *	62 Neutral	C$6.49B	9.24	3.44%	2.90%	6.99%	-11.09%

Regal Rexnord Corporate Events

Regal Rexnord Appoints New Board Members for Strategic Growth

On February 17, 2025, Regal Rexnord Corporation announced the appointment of Rashida A. Hodge from Microsoft and Gerben W. Bakker from Hubbell to its Board of Directors, with terms extending until the 2025 annual meeting of shareholders. This strategic move, coinciding with the retirement of long-serving director Anesa T. Chaibi, is seen as a step to bolster the company’s strategic direction and long-term success by integrating diverse expertise in technology, AI, and global manufacturing leadership.