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.