Monty Rakusen
Investment action
I recommended a hold rating for Rockwell Automation (NYSE:ROK) when I wrote about it last year as I expected the company to miss its FY24 guidance. Based on my current outlook and analysis, I recommend
Rockwell Automation: Stands To Benefit From Industrial Automation And Re-Shoring Trends (Rating Upgrade)
Summary
- I recommend a buy rating for Rockwell Automation.
- ROK's extensive installed base of PLCs and advanced automation tools like FactoryTalk Design Studio and LogixAI provide significant competitive advantages.
- Despite current financials not reflecting growth, I anticipate strong revenue acceleration from FY26/27 driven by increased capex and mega projects.
- Risks include macroeconomic headwinds and prolonged planning phases for large projects.
I consider an investment ideal if it performs its core business in a sector projected to experience structural (organic) growth in excess of GDP growth over the next 5-10 years; profits from sustainable competitive advantages that translate into attractive unit economics; In the hands of competent, ethical, and long-term thinkers; with a fair valuation
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.
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