Despite Supply Chain Disruptions and a Stock Sell-Off, We Lift Our Rockwell FVE by 5%

Supply chain disruptions continue to be the story in the industrials sector, and we think the tradeoff in wide-moat rated Rockwell’s stock following fiscal first-quarter 2022 earnings reflects the market’s bearish sentiment. These supply chain concerns prompted management to maintain guidance, which we think contributed to the stock’s sell-off during the trading day, particularly as Rockwell’s valuation returned to more rational levels in the two weeks prior to this print. Nonetheless, we think there is some conservatism baked into the guide, despite many industrial CEOs describing the current operating environment as the most difficult in their lifetimes.