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Rockwell Automation Inc ROK

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Morningstar’s Analysis

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PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Rockwell’s Raised Guide and Margin Execution Prompts Us To Slightly Raise Fair Value Estimate by 1%

Joshua Aguilar Equity Analyst

Analyst Note

| Joshua Aguilar |

Wide-moat Rockwell Automation had a solid fiscal second-quarter showing, surpassing analyst estimates. The stock traded down just under 1% during the trading day, but we think that’s due mostly to valuation concerns around the name. These are concerns we share as we think Rockwell is slightly overvalued, like the multi-industry category generally. Nonetheless, management rightfully bumped up its full-year 2021 guidance on both the top- and bottom-lines, a move we support given year-to-date performance halfway through the fiscal year. The changes caused us to slightly tweak our fair value estimate upward by just over 1%. We raise our fair value estimate to $238 from $235 previously.

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Company Profile

Business Description

Rockwell Automation is a pure-play automation competitor that is the successor entity to Rockwell International, which spun off its former Rockwell Collins avionics segment in 2001. As of fiscal 2021, the firm operates through three segments--intelligent devices, software and control, and lifecycle services. Intelligent devices contains its drives, sensors, and industrial components, software and control contains its information and network and security software, while lifecycle services contains its consulting and maintenance services as well as its Sensia JV with Schlumberger.

Contact
1201 South Second Street
Milwaukee, WI, 53204
T +1 414 382-2000
Sector Industrials
Industry Specialty Industrial Machinery
Most Recent Earnings Mar 31, 2021
Fiscal Year End Sep 30, 2021
Stock Type Cyclical
Employees 23,500

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