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1. Company Snapshot

1.a. Company Description

RBC Bearings Incorporated manufactures and markets engineered precision bearings and components in the United States and internationally.It operates through two segments, Aerospace/Defense and Industrial.The company produces plain bearings with self-lubricating or metal-to-metal designs, including rod end bearings, spherical plain bearings, and journal bearings; roller bearings, such as tapered roller bearings, needle roller bearings, and needle bearing track rollers and cam followers, which are anti-friction products that are used in industrial applications and military aircraft platforms; and ball bearings include high precision aerospace, airframe control, thin section, and industrial ball bearings that utilize high precision ball elements to reduce friction in high-speed applications.


It also offers mounted bearing products include mounted ball bearings, mounted roller bearings, and mounted plain bearings; and enclosed gearing product lines, including quantis gearmotor, torque arm, tigear, magnagear & maxum, and controlled start transmission.In addition, the company produces power transmission components include mechanical drive components, couplings, and conveyor components; engineered hydraulics and valves for aircraft and submarine applications, and aerospace and defense aftermarket services; fasteners; precision mechanical components, which are used in various general industrial applications; and machine tool collets that are used for holding circulars or rod-like pieces.It serves automotive, tool holding, agricultural and semiconductor machinery, commercial and defense aerospace, ground defense, construction and mining, oil and natural resource extraction, heavy truck, marine, rail and train, packaging, food and beverage, packaging and canning, wind, and general industrial markets through its direct sales force, as well as a network of industrial and aerospace distributors.


The company was founded in 1919 and is headquartered in Oxford, Connecticut.

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1.b. Last Insights on RBC

RBC Bearings' recent performance was driven by strong Q2 results, with double-digit revenue growth and margin expansion. The company's aerospace and defense segment saw significant growth, backed by robust orders and backlog. Its industrial strength also contributed to the positive results. RBC Bearings' Q2 earnings of $2.88 per share beat estimates, and its upbeat Q3 sales guidance further boosted investor confidence. Additionally, the company's strategic acquisitions have been accretive, and its healthy backlog provides a solid foundation for future growth.

1.c. Company Highlights

2. RBC Bearings Delivers Strong Q2 Earnings with 14.4% Revenue Growth

RBC Bearings reported a robust financial performance in the second quarter of fiscal 2026, with net sales reaching $455.3 million, representing a 14.4% increase year-over-year. The company's consolidated gross margin was 44.1%, up from 43.7% in the same period last year. Adjusted EPS came in at $2.88, beating estimates of $2.73 and marking a 25.8% increase from $2.29 last year. Free cash flow was $71.7 million, demonstrating the company's ability to generate cash from its operations.

Publication Date: Nov -08

📋 Highlights
  • Net Sales Growth:: Q2 net sales rose 14.4% YoY to $455.3 million, driven by Aerospace and Defense and industrial segments.
  • Adjusted EPS Surge:: Earnings per share increased 25.8% to $2.88 from $2.29 in the prior year.
  • Aerospace & Defense Outperformance:: Segment grew 38.8% YoY, with defense up 73.3% and commercial aerospace up 21.6%.
  • Backlog Expansion:: Expected to reach $2 billion by year-end, with 90% in A&D, including $500 million from the VACCO acquisition.
  • Free Cash Flow Strength:: Generated $71.7 million in free cash flow, reflecting strong operational efficiency and margin improvement to 44.1%.

Aerospace and Defense Segment Drives Growth

The Aerospace and Defense segment was a key driver of the company's growth, with sales increasing by 38.8% year-over-year. Commercial aerospace sales rose by 21.6%, while defense sales surged by 73.3%. The industrial OEM business experienced a decline of 4.7%, but industrial distribution sales grew by 3.3%. The company's backlog is expected to approach $2 billion by year-end, with 90% of it in the A&D segment.

Valuation Metrics Suggest Premium Pricing

With a P/E Ratio of 52.68 and an EV/EBITDA ratio of 30.03, the company's valuation metrics suggest that investors are pricing in a high level of growth. The P/S Ratio is 7.97, which is also relatively high. However, the company's ROE of 8.44% and ROIC of 6.37% indicate a decent return on equity and invested capital. The Net Debt / EBITDA ratio is 2.12, which is manageable.

Guidance and Outlook

RBC Bearings expects revenues to be between $454 million and $462 million in the third quarter, representing a 15.1% to 17.1% year-over-year growth. Adjusted gross margins are projected to be between 44% and 44.25%. The company's guidance suggests a continued strong performance in the A&D segment. Analysts estimate next year's revenue growth to be around 13.2%, which is slightly lower than the current year's growth rate.

Operational Highlights and Future Plans

The company is focused on executing its organic growth strategy, integrating the VACCO acquisition, and driving operational efficiencies. RBC Bearings is also investing in capacity planning, adding shifts, manpower, and capital to support growth in the A&D and industrial segments. The company's MET program is helping to develop a pool of talented engineers, which will support future growth. As Mike Hartnett noted, "We're well-positioned to achieve our objectives and drive sustainable growth, leveraging our core strengths in engineering excellence, operational efficiency, and innovative product development."

3. NewsRoom

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Cetera Investment Advisers Sells 310 Shares of RBC Bearings Incorporated $RBC

Dec -02

Source: defenseworld.net

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Charles Schwab Investment Management Inc. Has $120.26 Million Stake in RBC Bearings Incorporated $RBC

Nov -28

Source: defenseworld.net

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Artisan Global Discovery Fund: Q3 Delivers Strong Results Amid Trimming And Exits

Nov -20

Source: seekingalpha.com

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AlphaQuest LLC Makes New $83,000 Investment in RBC Bearings Incorporated $RBC

Nov -06

Source: defenseworld.net

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RBC Bearings Q2 Earnings & Revenues Surpass Estimates, Rise Y/Y

Nov -04

Source: zacks.com

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RBC Bearings Incorporated (RBC) Q2 2026 Earnings Call Transcript

Oct -31

Source: seekingalpha.com

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RBC Bearings (RBC) Surpasses Q2 Earnings and Revenue Estimates

Oct -31

Source: zacks.com

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D.A. Davidson & CO. Sells 265 Shares of RBC Bearings Incorporated $RBC

Oct -30

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.83%)

6. Segments

Industrial

Expected Growth: 6.5%

RBC Bearings Incorporated's 6.5% growth in the Industrial segment is driven by increasing demand for precision bearings in industrial automation, robotics, and renewable energy applications. Additionally, the company's focus on innovation, quality, and customer service has led to market share gains and pricing power, contributing to the segment's growth.

Aerospace/Defense

Expected Growth: 7.5%

RBC Bearings Incorporated's 7.5% growth in Aerospace/Defense is driven by increasing demand for commercial aircraft, military modernization programs, and growing adoption of advanced materials in aircraft production. Additionally, the company's diversified product portfolio, strong relationships with major OEMs, and strategic acquisitions contribute to its growth momentum.

7. Detailed Products

Plain Bearings

RBC Bearings Incorporated offers a wide range of plain bearings, including cylindrical, spherical, and tapered designs, used in various industrial applications.

Roller Bearings

The company provides a variety of roller bearings, including cylindrical, spherical, and tapered designs, suitable for high-load and high-speed applications.

Ball Bearings

RBC Bearings Incorporated offers a range of ball bearings, including deep groove, angular contact, and self-aligning designs, suitable for high-speed and low-friction applications.

Mounted Bearings

The company provides mounted bearings, including pillow blocks, flange blocks, and take-up units, designed for easy installation and maintenance.

Aerospace Bearings

RBC Bearings Incorporated offers specialized bearings for aerospace applications, including high-temperature and high-load designs.

Custom Bearings

The company provides custom bearing solutions, designed to meet specific customer requirements and applications.

8. RBC Bearings Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

RBC Bearings Incorporated operates in a niche market with high barriers to entry, reducing the threat of substitutes.

Bargaining Power Of Customers

RBC Bearings Incorporated has a diverse customer base, reducing the bargaining power of individual customers.

Bargaining Power Of Suppliers

RBC Bearings Incorporated relies on a few key suppliers, giving them some bargaining power, but the company's size and diversification mitigate this risk.

Threat Of New Entrants

RBC Bearings Incorporated operates in a capital-intensive industry with high barriers to entry, reducing the threat of new entrants.

Intensity Of Rivalry

RBC Bearings Incorporated operates in a highly competitive industry with several established players, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 30.45%
Debt Cost 7.63%
Equity Weight 69.55%
Equity Cost 11.22%
WACC 10.12%
Leverage 43.77%

11. Quality Control: RBC Bearings Incorporated passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Snap-on

A-Score: 6.8/10

Value: 3.9

Growth: 6.0

Quality: 8.1

Yield: 6.0

Momentum: 7.5

Volatility: 9.0

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Lincoln Electric

A-Score: 5.4/10

Value: 2.4

Growth: 6.4

Quality: 6.3

Yield: 2.0

Momentum: 7.5

Volatility: 7.7

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RBC Bearings

A-Score: 5.3/10

Value: 0.8

Growth: 7.4

Quality: 6.8

Yield: 0.0

Momentum: 8.5

Volatility: 8.3

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Toro

A-Score: 5.1/10

Value: 4.1

Growth: 6.1

Quality: 5.8

Yield: 3.0

Momentum: 3.5

Volatility: 8.0

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Timken

A-Score: 4.9/10

Value: 5.4

Growth: 5.1

Quality: 4.6

Yield: 4.0

Momentum: 3.5

Volatility: 7.0

1-Year Total Return ->

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Stanley Black & Decker

A-Score: 4.2/10

Value: 4.9

Growth: 3.1

Quality: 3.9

Yield: 7.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

443.44$

Current Price

443.44$

Potential

-0.00%

Expected Cash-Flows