RBC Bearings Incorporated (RBC) | Investment Case

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 momentum is driven by its robust aerospace and defense segment, fueled by strong OEM demand and a rising backlog. The VACCO acquisition synergies are also contributing to its growth. Additionally, the company's solid backlog and increasing demand for its products, as indicated by the ISM's PMI rebound, are poised to drive its business forward. Analysts have assigned a "Moderate Buy" rating, according to MarketBeat.com.

1.c. Company Highlights

Last Price	556.95
Change Percentage	-0.40%
Open	559.18
Previous Close	559.18
Market Cap ( Millions)	17610
Volume	97051
Year High	564.7
Year Low	297.28
M A 50	493.15
M A 200	417.42

FCF Yield	1.88%
Dividend Yield	0.00%
ROE	8.53%
Debt / Equity	33.90%
Net Debt / EBIDTA	191.21%
Price To Book	5.38
Price Earnings Ratio	65.28
Price To FCF	53.28
Price To sales	9.82
EV / EBITDA	35.61

2. RBC Bearings Delivers Strong Q3 Earnings, Driven by A&D Segment Growth

RBC Bearings reported a robust fiscal third quarter 2026, with net sales reaching $161 million, a 17% increase over the same period last year. The company's consolidated gross margin for the quarter was 44.3%, or 45.1% on an adjusted basis, while adjusted diluted EPS came in at $3.04, a 30% improvement from $2.34 a year ago. Notably, the actual EPS was $2.13, slightly below estimates of $2.85. Revenue growth was driven by continued strong performance in the A&D segment, as well as growth from industrial businesses.

Publication Date: Feb -06

                                    📋 Highlights
                                    Revenue Growth::
                                                Q3 net sales reached $161 million, reflecting a 17% increase compared to the previous year.
Adjusted Earnings::
                                                Adjusted diluted EPS rose 30% YoY to $3.04, driven by improved margins and operational efficiency.
Debt Reduction::
                                                The company repaid $81 million in debt during Q3, with an additional $67 million settled post-quarter.
Q4 Revenue Outlook::
                                                Projected revenue of $495–$550 million (13.1–15.4% YoY growth) reflects sustained demand in aerospace and defense.

                                

Segment Performance and Outlook

The demand across the A&D sectors remains robust, with the company modestly exceeding the $2 billion backlog mark. According to Michael Hartnett, "The strength and outlook on the A&D sector can only be described as extremely robust." The company expects to see continued growth in the A&D segment, driven by increased demand for proprietary quiet running valves for submarines and staple components for space exploration systems. For fiscal fourth quarter 2026, the company projects revenues of $495 million to $550 million, representing year-over-year growth of 13.1% to 15.4%.

Valuation and Growth Expectations

Analysts estimate next year's revenue growth at 11.1%. With a current P/E Ratio of 61.05 and EV/EBITDA of 34.07, the market appears to be pricing in significant growth expectations. The company's ROE of 8.53% and ROIC of 6.49% indicate a relatively healthy profitability profile. As the company continues to deleverage, having paid off $81 million of debt during the quarter and another $67 million since the end of Q3, its Net Debt / EBITDA ratio stands at 0.49.

Industrial Business and Integration

In the industrial business, Rob Sullivan expects orders to be good in the fourth quarter, with some incremental growth expected. The company is still in the middle innings of integrating Dodge, with some bright things ahead, including new service center and product initiatives. Michael Hartnett notes that the industrial business will be better than the low single-digit growth rate expected by its peers, with high single-digit growth as a worst-case scenario.

Missile Business and Production Rates

On missiles, Michael Hartnett expects to see growth this quarter, with a significant increase in hypersonic production. The company has the capacity to take on increased demand without needing major investments to tool up for higher production rates. Boeing's production rate push towards 50 737s per month, with a goal of 60, is also expected to benefit the company, as it is in lockstep with Boeing's production rates.

3. NewsRoom

4 Stocks to Grab as Higher Industrial Production Boosts Manufacturing

Feb -20

Source: zacks.com

RBC Bearings (RBC) Upgraded to Strong Buy: Here's What You Should Know

Feb -19

Source: zacks.com

RBC Bearings Incorporated (NYSE:RBC) Given Average Recommendation of “Buy” by Brokerages

Feb -18

Source: defenseworld.net

Best Momentum Stock to Buy for February 12th

Feb -12

Source:

RBC Bearings Q3 Earnings & Revenues Surpass Estimates, Rise Y/Y

Feb -06

Source: zacks.com

Financial Survey: Flowserve (NYSE:FLS) and RBC Bearings (NYSE:RBC)

Feb -06

Source: defenseworld.net

RBC Bearings Incorporated (RBC) Q3 2026 Earnings Call Transcript

Feb -05

Source: seekingalpha.com

RBC Bearings (RBC) Tops Q3 Earnings and Revenue Estimates

Feb -05

Source: zacks.com

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

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

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Snap-on

A-Score: 6.3/10

Value: 4.3

Growth: 6.0

Quality: 8.2

Yield: 6.0

Momentum: 4.5

Volatility: 9.0

1-Year Total Return ->

Timken

A-Score: 5.5/10

Value: 5.8

Growth: 5.0

Quality: 5.2

Yield: 4.0

Momentum: 6.0

Volatility: 7.0

1-Year Total Return ->

RBC Bearings

A-Score: 5.3/10

Value: 0.9

Growth: 7.3

Quality: 6.6

Yield: 0.0

Momentum: 8.5

Volatility: 8.7

1-Year Total Return ->

Lincoln Electric

A-Score: 5.3/10

Value: 2.2

Growth: 6.4

Quality: 6.6

Yield: 2.0

Momentum: 7.0

Volatility: 7.7

1-Year Total Return ->

Toro

A-Score: 4.8/10

Value: 3.9

Growth: 5.4

Quality: 6.0

Yield: 3.0

Momentum: 3.0

Volatility: 7.7

1-Year Total Return ->

Stanley Black & Decker

A-Score: 4.5/10

Value: 5.1

Growth: 3.1

Quality: 4.2

Yield: 7.0

Momentum: 2.5

Volatility: 5.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

24.28%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.12%

RBC Bearings Incorporated - US75524B1044

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on RBC

1.c. Company Highlights

Expensive

Higher Growth

Average Quality

Earnings Beats

Earnings Miss

Revenues Miss

Medium Volatility

Revenues Beats

Better Quality

Less Volatile

2. RBC Bearings Delivers Strong Q3 Earnings, Driven by A&D Segment Growth

Segment Performance and Outlook

Valuation and Growth Expectations

Industrial Business and Integration

Missile Business and Production Rates

3. NewsRoom

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%

Aerospace/Defense

Expected Growth: 7.5%

7. Detailed Products

Plain Bearings

Roller Bearings

Ball Bearings

Mounted Bearings

Aerospace Bearings

Custom Bearings

8. RBC Bearings Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

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

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

556.95$

Current Price

556.95$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA