ROK

Rockwell Automation Inc

Industrial/Transportation


Presented:04/10/2019
Price:$182.86
Cap:$21.86B
Current Price:$272.22
Cap:$30.89B

Presented

Date04/10/2019
Price$182.86
Market Cap$21.86B
Ent Value$19.40B
P/E Ratio26.86x
Book Value$10.66
Div Yield2.12%
Shares O/S119.54M
Ave Daily Vol883,233
Short Int2.62%

Current

Price$272.22
Market Cap$30.89B
Rockwell Automation, Inc. engages in the provision of industrial automation and information services. It operates through the Architecture and Software, and Control Products and Solutions segment. The Architecture and Software segment contains hardware, software, and communication components of its integrated control and information architecture which are capable of controlling the customer's industrial processes and connecting with their business enterprise. The Control Products and Solutions segment combines a portfolio of intelligent motor control and industrial control products, application expertise, and project management capabilities. The company was founded in 1928 and is headquartered in Milwaukee, WI.

Publicly traded companies mentioned herein: Emerson Electric Co (EMR), PTC Inc (PTC), Rockwell Automation Inc (ROK)

Highlights

With shares of Rockwell Automation (ROK) trading ~20% below Emerson's $225 bid (late 2017), the presenter sees a favorable risk/reward setup and is long the stock. The industrial automation company has “great financial/fundamental characteristics” and is ideally positioned to win new business as macro trends (e.g., rising labor costs and shortages of skilled factory/plant labor) lead companies to look for more automation solutions. As SG&A as a percentage of sales declines and revenue grows (aided by the partnership with PTC), ROK should be able to generate $12.25 of cash flow per share (fiscal ‘21). If the stock can continue to trade at 18x - 20x forward earnings, and the value of its PTC stake is included, the implied price target range is $229 - $253 over 12 - 24 months.

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Idea Discussion

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