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Regal Rexnord (RRX)
NYSE:RRX
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Regal Rexnord
(NYSE:RRX)
Rating:64Neutral
Price Target:
$156.00
▲(9.72% Upside)
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 (RRX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.70B
Dividend Yield0.98%
Average Volume (3M)889.37K
Price to Earnings (P/E)38.9
Beta (1Y)1.26
Revenue Growth-7.88%
EPS GrowthN/A
CountryUS
Employees30,000
SectorIndustrials
Sector Strength74
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)2.48
Shares Outstanding66,374,190
10 Day Avg. Volume622,178
30 Day Avg. Volume889,369
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.48
Enterprise Value/Revenue2.45
Enterprise Value/Gross Profit6.59
Enterprise Value/Ebitda12.19
Forecast
1Y Price Target
$178.57Price Target Upside25.59% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Regal Rexnord Business Overview & Revenue Model
Company DescriptionRegal Rexnord Corporation (RRX) is a global leader in the design and manufacturing of innovative motion control and power transmission solutions. Operating primarily in the industrial and commercial sectors, Regal Rexnord provides a wide range of products, including bearings, gears, motors, and power transmission systems. The company serves various industries such as aerospace, automotive, food and beverage, and energy, leveraging advanced technology and extensive engineering expertise to deliver high-performance solutions that enhance efficiency and reliability.
How the Company Makes MoneyRegal Rexnord generates revenue through multiple key streams, including the sale of its extensive range of products such as bearings, motors, and drive systems, which are essential for many industrial applications. The company also earns money through service agreements, providing maintenance, repair, and support for its products. Additionally, Regal Rexnord benefits from strategic partnerships with other industry leaders, enhancing its market reach and innovation capabilities. Factors contributing to its earnings include a focus on research and development, enabling the introduction of advanced products that meet evolving customer needs, as well as its ability to capitalize on trends in automation and energy efficiency.
Regal Rexnord Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Neutral
Regal Rexnord's earnings call highlighted strong free cash flow, significant data center wins, and progress in cross-sell synergies. However, challenges such as sales declines in key segments, rare earth magnet availability issues, and tariff impacts were notable. The company remains optimistic about future growth, but the balance of positive and negative factors suggests a mixed outlook.Q2-2025 Updates
Positive Updates
Adjusted Earnings Per Share Exceeded Expectations
Regal Rexnord delivered adjusted earnings per share of $2.48, up 8.3% versus the prior year, modestly ahead of expectations.
Strong Free Cash Flow Generation
The company generated $493 million of free cash flow in the second quarter, including $368.5 million from an accounts receivable securitization program.
Data Center Order Success
Regal Rexnord secured a significant $35 million data center order with potential for more similar-sized orders, boosting the enterprise growth rate next year.
Cross-Sell Synergies Progress
The company is on track to achieve $250 million in cross-sell synergies, with a current funnel of $300 million and a win rate tracking 10 points above the enterprise average.
Positive Momentum in Automation and Motion Control (AMC) Segment
The AMC segment saw July orders up approximately 21.5% due to multiple data center wins, indicating strong momentum.
Negative Updates
Sales Decline in Multiple Segments
Second quarter sales were down 1.2% on an organic basis, with specific declines in Automation and Motion Control (down 3.4%) and Industrial Powertrain Solutions (down 4.4%).
Rare Earth Magnet Availability Impact
Challenges in securing rare earth magnets led to a temporary plant shutdown and cost increases, negatively impacting sales by $10 million and AMC margins.
Order Decline in AMC Segment
AMC orders in the quarter were down 7.5% due to the timing of a large data center order and tough year-over-year comparisons.
Continued Destocking in Medical Markets
The company faced ongoing destocking in the medical end market, impacting AMC segment performance.
Tariff Challenges
The company is facing significant tariff impacts, with a gross annual unmitigated cost impact from tariffs estimated at $125 million.
Company Guidance
During the Regal Rexnord Second Quarter 2025 Earnings Conference Call, the company provided guidance for the remainder of the fiscal year and into 2026. Sales were down 1.2% year-over-year on an organic basis, impacted by headwinds such as project timing in the IPS segment and rare earth magnet constraints, but were offset by strength in residential and commercial HVAC and aerospace. Orders for the quarter were down 2.5%, with AMC orders declining by 7.5%. Adjusted EBITDA margin was 22%, while adjusted earnings per share rose 8.3% to $2.48. Free cash flow for the quarter was $493 million, with $368.5 million from an accounts receivable securitization program. For the full year, Regal Rexnord maintained its adjusted EPS guidance midpoint, with a range of $9.70 to $10.30, and adjusted EBITDA margin expectations were revised to 22.5%. The company expects low single-digit sales growth in the back half of 2025 and into 2026, supported by a strong backlog and ongoing cross-sell synergies.Regal Rexnord Financial Statement Overview
Summary
Regal Rexnord demonstrates solid financial health with strong cash flow generation and a stable balance sheet. Despite challenges in revenue growth, the company maintains operational efficiency and a strong equity position, providing a foundation for future growth.Income Statement
Regal Rexnord's income statement shows mixed results. The TTM data indicates a slight decline in revenue growth, but the company maintains a healthy gross profit margin of 36.65%. The net profit margin is modest at 3.96%, reflecting some profitability challenges. EBIT and EBITDA margins are stable, suggesting operational efficiency despite revenue pressures.65
Positive
Balance Sheet
The balance sheet reveals a moderate debt-to-equity ratio of 0.85, indicating manageable leverage. The return on equity is low at 3.66%, suggesting limited profitability from equity investments. However, the equity ratio of 48.18% reflects a strong equity base, providing financial stability.70
Positive
Cash Flow
Cash flow analysis shows a robust free cash flow growth rate of 70.49% TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is healthy at 3.97, and the free cash flow to net income ratio is strong at 0.83, highlighting efficient cash conversion.75
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.85B | 6.03B | 6.25B | 5.22B | 3.81B | 2.91B |
| Gross Profit | 2.18B | 2.20B | 2.11B | 1.70B | 1.07B | 828.40M |
| EBITDA | 1.18B | 1.17B | 971.00M | 1.04B | 573.00M | 447.20M |
| Net Income | 250.40M | 196.20M | -57.40M | 488.90M | 229.60M | 189.30M |
Balance Sheet | ||||||
| Total Assets | 13.90B | 14.03B | 15.43B | 10.27B | 10.37B | 4.59B |
| Cash, Cash Equivalents and Short-Term Investments | 320.10M | 393.50M | 574.00M | 688.50M | 672.80M | 611.30M |
| Total Debt | 5.00B | 5.61B | 6.55B | 2.14B | 2.04B | 1.15B |
| Total Liabilities | 7.19B | 7.77B | 9.07B | 3.85B | 3.96B | 2.01B |
| Stockholders Equity | 6.70B | 6.26B | 6.34B | 6.39B | 6.37B | 2.54B |
Cash Flow | ||||||
| Free Cash Flow | 887.90M | 499.90M | 596.20M | 352.40M | 303.20M | 387.90M |
| Operating Cash Flow | 993.50M | 609.40M | 715.30M | 436.20M | 357.70M | 435.40M |
| Investing Cash Flow | -79.00M | 275.40M | -4.98B | -113.30M | -175.70M | -37.00M |
| Financing Cash Flow | -1.11B | -1.10B | 4.20B | -274.20M | -117.60M | -147.60M |
Regal Rexnord Technical Analysis
Negative
142.18
Price Trends
148.79
Negative
137.38
Positive
141.22
Positive
Market Momentum
0.02
Positive
42.39
Neutral
31.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RRX, the sentiment is Negative. The current price of 142.18 is below the 20-day moving average (MA) of 147.02, below the 50-day MA of 148.79, and above the 200-day MA of 141.22, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 42.39 is Neutral, neither overbought nor oversold. The STOCH value of 31.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RRX.
Regal Rexnord Risk Analysis
Regal Rexnord disclosed 36 risk factors in its most recent earnings report. Regal Rexnord 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
Regal Rexnord Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $9.27B | 29.87 | 17.75% | 0.68% | 2.96% | 12.62% | |
78 Outperform | $9.28B | 26.12 | 24.94% | 1.43% | 2.92% | -9.78% | |
78 Outperform | $8.61B | 40.82 | 15.02% | ― | 8.90% | 29.18% | |
76 Outperform | $9.86B | 19.63 | 27.60% | 1.92% | -3.53% | -7.46% | |
72 Outperform | $10.56B | 34.62 | 18.23% | 0.49% | 3.01% | 27.13% | |
64 Neutral | $9.70B | 38.86 | 3.84% | 0.98% | -7.88% | ― | |
64 Neutral | $10.66B | 15.60 | 8.14% | 2.00% | 2.79% | -14.82% |
* Industrials Sector Average
Performance Comparison
RRX
Regal Rexnord
142.18
-5.38
-3.65%
DCI
Donaldson Company
79.62
10.99
16.01%
AOS
A. O. Smith Corporation
70.79
-4.64
-6.15%
SPXC
SPX
186.63
45.78
32.50%
WTS
Watts Water Technologies
275.72
88.17
47.01%
CR
Crane Company
182.56
41.04
29.00%
Regal Rexnord Corporate Events
Executive/Board Changes
Regal Rexnord Announces Leadership Transition in August
Neutral
Aug 8, 2025
Regal Rexnord Corporation announced that Kevin Zaba, Executive Vice President & President of Automation & Motion Control, will retire on December 31, 2025. Kevin Long will succeed him starting August 14, 2025, ensuring a smooth transition period until the retirement date.
Shareholder MeetingsBusiness Operations and StrategyRegulatory Filings and Compliance
Regal Rexnord Approves Bylaws Amendments for Governance Flexibility
Neutral
Jul 25, 2025
On July 22, 2025, Regal Rexnord Corporation’s Board of Directors approved significant amendments to the company’s Bylaws, allowing for remote shareholder meetings and aligning proxy rules with SEC requirements. These changes, effective immediately, aim to enhance corporate governance and operational flexibility, potentially impacting shareholder engagement and regulatory compliance.
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.