Rockwell Automation logged a -0.3% change during today's morning session, and is now trading at a price of $273.99 per share.
Rockwell Automation shares moved 7.1% over the last 52 weeks, with a high of $309.36 and a low of $190.08. During this time, the stock outperformed the S&P 500 index by 10.0%. As of January 2022, the company's 50-day average price is $286.0. Rockwell Automation, Inc. provides industrial automation and digital transformation solutions in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The large-cap Industrials company has 26,000 full time employees and is based in Milwaukee, WI. Rockwell Automation has returned a 1.7% dividend yield over the last 12 months.
Snapshot of the Company's Consistent Operating Margins:
| 2019-09-30 | 2020-09-30 | 2021-09-30 | 2022-09-30 | |
|---|---|---|---|---|
| Revenue (MM) | $6,695 | $6,330 | $6,997 | $7,760 |
| Revenue Growth | n/a | -5.45% | 10.55% | 10.9% |
| Gross Margins | 43.3% | 41.0% | 41.4% | 40.0% |
| Gross Margins Growth | n/a | -5.31% | 0.98% | -3.38% |
| Operating Margins | 20.3% | 17.6% | 17.4% | 17.2% |
| Operating Margins Growth | n/a | -13.3% | -1.14% | -1.15% |
| Net Margins | 10.39% | 16.16% | 19.41% | 11.84% |
| Net Margins Growth | n/a | 55.53% | 20.11% | -39.0% |
| Earnings Per Share | $5.83 | $8.77 | $11.58 | $9.24 |
| EPS Growth | n/a | 50.43% | 32.04% | -20.21% |
| Diluted Shares (MM) | 119 | 117 | 117 | 115 |
| Free Cash Flow (MM) | $1,049 | $1,007 | $1,141 | $682 |
| FCF Growth | n/a | -4.06% | 13.32% | -40.21% |
| Capital Expenditures (MM) | -$133 | -$114 | -$120 | -$141 |
| Net Debt / EBITDA | 1.08 | 0.92 | 1.82 | 2.33 |
Rockwell Automation Is Overpriced:
Compared to the Industrials sector's average of 20.49, Rockwell Automation has a trailing twelve month P/E ratio of 29.7 and, according to its EPS guidance of 12.36, an expected P/E ratio of 22.2. Rockwell Automation's PEG ratio is 1.91 based on its 16.2% compound average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 9.8%, because the growth rate implied by Rockwell Automation's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 3.16, which suggests that the company's shares are actually overvalued.
Rockwell Automation's P/B ratio is 10.8 compared to its sector average of 3.78. The company is likely overvalued in terms of its net asset value. The company's shares are currently trading 285.1% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 8.86 * 25.394) = $71.15
Rockwell Automation Is the Subject of Mixed Market Indicators:
21 analysts are following Rockwell Automation and have set target prices ranging from $220.0 to $335.0 per share. On average, they have given the company a rating of hold. At the current price of $273.99, ROK is trading -2.74% away from its average analyst target price of $281.71 per share, implying an analyst consensus of some upside potential for the stock.
The company has an average amount of shares sold short since 3.1% of the company's shares are tied to short positions. Institutions own 83.0% of Rockwell Automation's shares, while the insider ownership rate stands at 0.16%. The biggest shareholder is the Vanguard Group, Inc. with a 12% stake in the company worth approximately $3,725,137,494.
