Rockwell Automation Struggles to Keep Pace with Market Growth
Rockwell Automation, Inc. (ROK), currently valued at $32.8 billion, stands out in the industrial automation and digital transformation sector. Based in Milwaukee, Wisconsin, the company focuses on advanced automation solutions incorporating hardware, software, and services aimed at enhancing manufacturing processes across numerous industries.
Stock Performance: An Uphill Battle
Over the past year, shares of Rockwell Automation have lagged behind the overall market. ROK stock has seen an 8.4% increase while the broader S&P 500 Index ($SPX) experienced a robust 32.1% gain. In 2024, the ROK stock has decreased by 4.7%, contrasting with the S&P’s impressive 26.2% year-to-date growth.
Further analysis reveals that ROK has also underperformed versus the Industrial Select Sector SPDR Fund (XLI), which has risen approximately 35.1% over the past year and 26.1% year-to-date.
Mixed Earnings Report Raises Concerns
On November 7, ROK’s stock fell 5.8% following a mixed report for Q4 earnings. Revenue dropped 20.6% year-over-year to $2.04 billion, underperforming the $2.07 billion expectations. However, adjusted earnings per share (EPS) plunged 32.1% to $2.47, which did beat the anticipated $2.40. Looking forward, the company issued cautious guidance for fiscal 2025, estimating adjusted EPS between $8.60 and $9.80, as it navigates ongoing market challenges.
Analysts project an EPS decline of 2.6% for the current fiscal year ending in September 2025, calculating it at $9.46 on a diluted basis. Historically, the company has had a mixed earnings surprise record, exceeding estimates in three of the last four quarters.
Analyst Consensus: Cautiously Optimistic
Out of 23 analysts assessing ROK stock, the consensus stands at a “Hold,” consisting of seven “Strong Buy” recommendations, 12 “Holds,” and four “Strong Sells.” This is a slight improvement compared to last month, with six analysts now advocating a “Strong Buy.”
Future Outlook and Analysts’ Predictions
Baird analyst Richard Eastman recently increased Rockwell Automation’s price target to $305 from $290. He expressed optimism about the company’s position to leverage manufacturer investments aimed at enhancing productivity and quality.
Although ROK’s stock is trading above the average price target of $279.65, the highest target of $345 implies a potential upside of 16.6% from current levels.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
