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Rockwell Automation, Inc. (ROK), headquartered in Milwaukee, Wisconsin, provides industrial automation and digital transformation solutions. The company is valued at $30 billion by market cap and offers products such as control systems, motor control devices, sensors, and industrial control panels. The industrial equipment and software maker is expected to announce its fiscal third-quarter earnings for 2024 before the market opens on Wednesday, Aug. 7.
Ahead of the event, analysts expect ROK to report a profit of $2.11 per share on a diluted basis, down 29.9% from $3.01 per share in the year-ago quarter. The company beat the consensus estimates in two of the last four quarters while missing on two other occasions.
In the previous quarter, the company reported an adjusted EPS of $2.50, surpassing the consensus estimate by 16.3%, thanks to the improved performance of its Lifecycle Services segment.
For the full year, analysts expect ROK to report EPS of $10.12, down 16.5% from $12.12 in fiscal 2023. However, its EPS is expected to rebound in fiscal 2025, rising 17.8% year over year to $11.92.
ROK stock has underperformed the S&P 500’s ($SPX) 19.2% gains over the past 52 weeks, with shares down 22.2% during this period. Similarly, it underperformed the S&P 500 Industrial Sector SPDR’s (XLI) 12.2% gains over the same time frame.
ROK’s underperformance in the broader market may be linked to its declining sales due to excess inventory among its customers, especially machine builders. Additionally, macroeconomic headwinds have also negatively impacted the stock.
Additionally, on May 7, the company reported its Q2 results, leading to a 1.9% drop in its shares. This decline followed a revision of its full-year organic sales forecast to negative 8% to 6%, down from a previous estimate of (2%) to 4%. The adjustment was driven by lower sales volume and operating margins in the Intelligent Devices and Software & Control segments.
However, ROK successfully beat its consensus topline and bottom-line estimates. The company has also updated its full-year guidance, now forecasting adjusted EPS between $10 and $11.
Analysts’ consensus opinion on ROK stock is neutral, with a “Hold” rating overall. Out of 21 analysts covering the stock, six advise a “Strong Buy” rating, 11 give a “Hold” rating, and four recommend a “Strong Sell.” ROK's average analyst price target is $281.67, indicating a potential upside of 7.1% from the current levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
