Regal Rexnord (RRX)
NYSE:RRX
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Regal Rexnord
(NYSE:RRX)
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Rating:61Neutral
Price Target:
$196.00
▼(-3.99% Downside)
Action:ReiteratedDate:02/06/26
The score is driven mainly by solid financial performance led by strong free cash flow and improving profitability, plus a constructive earnings outlook with strong order/backlog visibility. These positives are tempered by stretched technical conditions (overbought readings) and a demanding valuation (high P/E, low yield), which increase downside risk if execution or macro/tariff pressures disrupt guidance.
Positive Factors
Free cash flow generation
Sustained, large free cash flow provides durable financial flexibility: it funds capex and working-capital needs for strategic growth (data center buildout), supports meaningful debt paydown and shareowner returns, and cushions the business versus cyclical revenue swings.
Negative Factors
Elevated absolute debt levels
Material absolute debt limits financial flexibility and increases sensitivity to cash-flow variability. Even with improving leverage targets, significant debt requires continued strong FCF and execution to hit ~2.7x net leverage, constraining capital allocation choices during slower demand periods.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow generation
Sustained, large free cash flow provides durable financial flexibility: it funds capex and working-capital needs for strategic growth (data center buildout), supports meaningful debt paydown and shareowner returns, and cushions the business versus cyclical revenue swings.
Read all positive factors
Regal Rexnord (RRX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.81B
Dividend Yield0.97%
Average Volume (3M)1.09M
Price to Earnings (P/E)36.7
Beta (1Y)1.29
Revenue Growth-4.99%
EPS Growth22.16%
CountryUS
Employees30,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)2.51
Shares Outstanding66,499,580
10 Day Avg. Volume807,947
30 Day Avg. Volume1,089,549
Financial Highlights & Ratios
PEG Ratio0.77
Price to Book (P/B)1.36
Price to Sales (P/S)1.57
P/FCF Ratio10.42
Enterprise Value/Market Cap1.33
Enterprise Value/Revenue3.09
Enterprise Value/Gross Profit8.22
Enterprise Value/Ebitda15.25
Forecast
1Y Price Target
$238.29Price Target Upside16.72% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)10.68
Revenue Forecast (FY)$6.13B
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 comp...
How the Company Makes Money
Regal Rexnord makes money primarily by selling engineered, branded industrial components and systems that transmit power, control motion, and improve equipment efficiency and reliability. Revenue is generated through (1) original equipment manufac...
Regal Rexnord Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call conveyed strong positive momentum driven by exceptional order intake (notably a $735M e‑Pod win), a 50% year‑over‑year backlog increase, improving organic sales and double-digit EPS growth guidance. The company demonstrated margin resilience, meaningful free cash flow generation in 2025, substantial debt paydown and clear secular-market growth plans (data center, robotics, eVTOL, Kollmorgen Essentials). Significant near‑term risks remain — primarily PES channel destocking, rare earth magnet supply constraints, tariff impacts (~$155M annualized) and a reduced 2026 free cash flow guide due to working capital investments to support data center expansion. On balance the highlights (large, high‑visibility orders and backlog, revenue and EPS growth, strategic progress) outweigh the lowlights (segment weakness and near‑term supply/tariff pressures), supporting a positive outlook while acknowledging execution and macro risks that management is actively managing.Positive Updates
Exceptionally Strong Order Intake and Backlog Growth
Q4 orders on a daily basis were up 53.8% year-over-year and book-to-bill was 1.48. Backlog exiting 2025 was up ~50% versus prior year, providing significant revenue visibility into 2026 and beyond.
Negative Updates
Power Efficiency Solutions (PES) Weakness and Channel Destocking
PES organic sales in Q4 were down 10.7% year-over-year and orders in PES were down 15.9% on a daily basis (book-to-bill 0.91). Management attributes the shortfall primarily to severe channel destocking after the A2L regulatory transition and expects residential HVAC to be down high-single-digits in 2026 with first-half pressure.
Read all updates
Q4-2025 Updates
Positive
Negative
Exceptionally Strong Order Intake and Backlog Growth
Q4 orders on a daily basis were up 53.8% year-over-year and book-to-bill was 1.48. Backlog exiting 2025 was up ~50% versus prior year, providing significant revenue visibility into 2026 and beyond.
Read all positive updates
Company Guidance
For 2026 management guided to roughly 3% sales growth (about 1–1.5 points from the large data‑center project and ~1.5 points from price largely tied to tariffs), adjusted EBITDA margin of 22.5 (up 50 bps), adjusted EPS of $10.20–$11.00 (midpoint $10.60, ≈10% growth), and adjusted free cash flow of ~ $650M (with CapEx ~ $120M); they expect to realize $40M of cost synergies (treated as contingency), embedded tariffs causing an annualized unmitigated impact of ~$155M but expect to be dollar cost neutral on tariffs by mid‑2026 and margin neutral by year‑end, assume volume broadly flat outside data centers, plan $50–$100M of working‑capital/inventory support for data center growth, see Q1 as the EPS low point with enterprise adjusted EBITDA ~21% in Q1 and sales weighted ~49%/51% H1/H2 (EPS ~48%/52% H1/H2), and target net leverage of about 2.7x by year‑end (≈3.0x midyear from 3.1x starting).Regal Rexnord Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
54
Neutral
Cash Flow
71
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.93B | 6.03B | 6.25B | 5.22B | 3.81B |
| Gross Profit | 2.22B | 2.20B | 2.11B | 1.70B | 1.07B |
| EBITDA | 1.20B | 1.17B | 971.00M | 1.04B | 573.00M |
| Net Income | 279.50M | 196.20M | -57.40M | 488.90M | 229.60M |
Balance Sheet | |||||
| Total Assets | 13.92B | 14.03B | 15.43B | 10.27B | 10.37B |
| Cash, Cash Equivalents and Short-Term Investments | 521.70M | 393.50M | 574.00M | 688.50M | 672.80M |
| Total Debt | 5.06B | 5.61B | 6.55B | 2.14B | 2.04B |
| Total Liabilities | 7.07B | 7.77B | 9.07B | 3.85B | 3.96B |
| Stockholders Equity | 6.84B | 6.26B | 6.34B | 6.39B | 6.37B |
Cash Flow | |||||
| Free Cash Flow | 893.10M | 499.90M | 596.20M | 352.40M | 303.20M |
| Operating Cash Flow | 990.80M | 609.40M | 715.30M | 436.20M | 357.70M |
| Investing Cash Flow | -71.00M | 275.40M | -4.98B | -113.30M | -175.70M |
| Financing Cash Flow | -814.10M | -1.10B | 4.20B | -274.20M | -117.60M |
Regal Rexnord Technical Analysis
Positive
204.15
Price Trends
196.05
Positive
170.79
Positive
157.81
Positive
Market Momentum
-1.36
Negative
58.64
Neutral
60.71
Neutral
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 204.15 is above the 20-day moving average (MA) of 187.55, above the 50-day MA of 196.05, and above the 200-day MA of 157.81, indicating a bullish trend. The MACD of -1.36 indicates Negative momentum. The RSI at 58.64 is Neutral, neither overbought nor oversold. The STOCH value of 60.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 "Production" 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $10.14B | 27.54 | 17.82% | 0.70% | 4.18% | 16.05% | |
77 Outperform | $9.30B | 17.13 | 29.51% | 2.04% | -1.64% | -2.50% | |
76 Outperform | $10.75B | 30.59 | 13.29% | ― | 12.60% | 24.02% | |
67 Neutral | $10.32B | 31.85 | 25.19% | 1.28% | 2.37% | -6.93% | |
65 Neutral | $10.77B | 28.93 | 19.12% | 0.49% | -0.37% | 21.77% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $13.81B | 36.68 | 4.18% | 0.97% | -4.99% | 22.16% |
* Industrials Sector Average
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Regal Rexnord
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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.