Regal Rexnord: Improving Growth Prospects And A Discounted Valuation

Summary

• Regal Rexnord's organic revenue growth is expected to turn positive in FY24 due to healthy backlog levels, improving end-market conditions, and potential interest rate cuts.
• The company's revenue growth was negatively impacted by inventory destocking, but this is expected to improve as inventory levels stabilize.
• The company's margin growth prospects are positive, driven by productivity improvements, cost-saving initiatives, and portfolio transformation.

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Investment Thesis

Regal Rexnord Corporation's (NYSE:RRX) organic revenue growth is poised to turn positive in FY24 driven by above-average backlog levels in the Industrial Powertrain Solutions (IPS) and Automation & Motion Control (AMC) segments, channel inventory destocking coming to an end, improving end-market conditions and a

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

This article is written by Ashish S.