Rockwell Earnings: We Think Long-Term Prospects Still Look Bright Despite Near-Term Headwinds

Rockwell reported fiscal second-quarter earnings below our expectations. Management now expects sales to be lower in 2024, which calls for reported sales growth of negative 6.0% to negative 4.0%. In 2024, we forecast sales to be down nearly 5% year on year. This reflects our view that demand for Rockwell’s products will be challenged in the near term. The company is still contending with inventory destocking. That said, the time value of money and upward tweaks to our 2025 sales and margin forecast more than offset our downward changes to 2024 estimates. As a result, our fair value estimate increased 1% to $312 per share, up from $309 previously.