After taking a fresh look at the industrial automation pure-play, we’ve decreased Rockwell’s fair value estimate to $270 per share from $310 derived from a slightly more bearish outlook on the firm’s long-term growth rate. We expect Rockwell’s exposure to short-cycle end markets to mute near-term performance but remain bullish on the company in the coming years.
Rockwell dominates niche industrial automation functions and has defended its position for decades, giving us confidence it can do so in the future.
Although Rockwell generates higher margins than peers, it competes against very large firms that can easily outspend it in R&D, potentially eroding the company's technology advantage over time.
|
Metric
|
ROK
|
EMR
|
HON
|
|---|---|---|---|
Price/Earnings (Normalized) | 24.33 | 20.68 | 20.81 |
Price/Book Value | 9.04 | 3.01 | 7.78 |
Price/Sales | 3.46 | 3.71 | 3.59 |
Price/Cash Flow | 22.09 | 19.38 | 21.76 |
|
Metric
|
ROK
|
EMR
|
HON
|
|---|---|---|---|
Quick Ratio | 0.60 | 0.67 | 0.83 |
Current Ratio | 1.04 | 1.16 | 1.21 |
Interest Coverage | 8.79 | 6.99 | 8.90 |
|
Metric
|
ROK
|
EMR
|
HON
|
|---|---|---|---|
Return on Assets (Normalized) | 11.04% | 5.36% | 9.35% |
Return on Equity (Normalized) | 36.17% | 11.67% | 35.72% |
Return on Invested Capital (Normalized) | 18.01% | 6.49% | 15.70% |
|
1-Day Chart
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