Rockwell’s Market Selloff a Gross Overreaction; We Raise Fair Value Estimate by Just Under 4%

We were surprised by the market’s negative reaction to Rockwell’s fiscal fourth-quarter and 2023 results. In fact, Rockwell’s reported revenue during the fourth quarter was nearly lineball accurate with our projections, while the firm outperformed our segment operating margins by 140 basis points. Adjusted EPS did fall below expectations, though GAAP EPS outperformed. Furthermore, sales guidance came ahead of our expectations, though segment operating margin and adjusted EPS guidance were right in line with what we earmarked. We raise our fair value estimate to $306 from $295, partially due to time value of money and partially due to our revised sales outlook.