Rockwell Automation Braces for Q1 Earnings Report Amidst Mixed Performance
Rockwell Automation, Inc. (ROK), established in 1903 and based in Milwaukee, Wisconsin, stands as a prominent figure in industrial automation and digital transformation. Currently, it boasts a market cap of $31.8 billion, providing advanced solutions that enable manufacturers to boost productivity, sustainability, and efficiency. The company is scheduled to release its Q1 earnings for fiscal 2025 on Wednesday, Jan. 29.
As the earnings announcement approaches, analysts predict ROK will report a profit of $1.62 per share, which is a significant decline of 20.6% from the $2.04 per share reported in the same quarter last year. Historically, the company has managed to exceed Wall Street’s expectations in three of its last four quarterly reports, encountering just one miss.
Recent Performance and Future Outlook
In its recent fiscal Q4, Rockwell Automation achieved an EPS of $2.47, surpassing consensus estimates by 2.9%. The company’s strong performance is attributed to successful cost-reduction strategies and growth in Lifecycle Services. For fiscal 2025, projections indicate an EPS of $9.37, reflecting a modest decrease of 3.5% from $9.71 in fiscal 2024.
Stock Performance Lags Behind Key Indices
Over the past year, ROK has fallen short of the S&P 500 Index’s ($SPX) 25.8% gains, with its shares down 7.8% during this time. The company also trailed the Industrial Select Sector SPDR Fund’s (XLI) 18.7% gains.
Challenges Affecting Earnings Potential
Rockwell Automation’s stock has suffered due to less-than-expected revenue growth, shrinking margins, and cautious guidance for the upcoming year. After releasing Q4 earnings on Nov. 7, shares experienced a significant drop of 5.8%. The reported revenue of $2.04 billion fell short of Wall Street estimates by 2.2%, marking a 20.6% year-over-year decline. Additionally, EBITDA totaled $373.5 million, missing projections by 12.9%. Although the operating margin remained steady at 20.1%, both EBITDA and free cash flow margins dipped to 18.3% and 18%, respectively.
Analyst Ratings and Stock Outlook
Currently, Rockwell Automation holds a consensus “Moderate Buy” rating, an improvement from its previous “Hold” rating just three months prior. Among 21 analysts covering ROK, nine have issued a “Strong Buy,” 11 recommend a “Hold,” and three suggest a “Strong Sell.” The average price target for ROK stock stands at $292.76, indicating a potential upside of 4.1% from its current trading level.
On the date of publication, Rashmi Kumari did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data provided here are for informational purposes only. For additional details, please view the Barchart Disclosure Policy here.
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