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1. Company Snapshot

1.a. Company Description

Rockwell Automation, Inc.provides industrial automation and digital transformation solutions in the United States and internationally.The company operates in three segments, Intelligent Devices, Software & Control, and Lifecycle Services.


Its solutions include hardware and software products, and services.The Intelligent Devices segment offers drives, motion, safety, sensing, industrial components, and configured-to-order products.The Software & Control segment provides control and visualization software and hardware, information software, digital twin and simulation software, and network and security infrastructure solutions.


The Lifecycle Services segment provides consulting, professional services and solutions, and connected and maintenance services.The company sells its solutions primarily through independent distributors in relation with its direct sales force.It serves discrete end markets, including automotive, semiconductor, warehousing and logistics, and other discrete markets, as well as general industries comprising printing and publishing, marine, glass, fiber and textiles, airports, and aerospace; hybrid end markets, such as food and beverage, life sciences, household and personal care, and tire, as well as eco industrial, including water/wastewater, waste management, mass transit, and renewable energy; and process end markets comprising oil and gas, mining, metals, chemicals, pulp and paper, and others.


Rockwell Automation, Inc.was founded in 1903 and is headquartered in Milwaukee, Wisconsin.

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1.b. Last Insights on ROK

Rockwell Automation's recent performance was driven by strong Q3 earnings, beating estimates with $2.82 per share, and sales growth, primarily fueled by its Software & Control segment. The company's improved operating margins and broad customer wins, including significant brownfield and greenfield opportunities, contributed to its success. Additionally, Rockwell Automation's plan to invest over $2 billion in plants, talent, and digital infrastructure over the next five years is expected to drive long-term growth. The company has also been upgraded to a Zacks Rank #1 (Strong Buy), indicating growing optimism about its earnings prospects.

1.c. Company Highlights

2. Rockwell Automation's Strong Q4 FY2025 Earnings: A Closer Look

Rockwell Automation reported robust fourth-quarter fiscal 2025 earnings, with double-digit year-over-year growth in sales and operating earnings. The company's reported sales were up 14% versus the prior year, exceeding expectations, while adjusted EPS of $3.34 was above expectations, driven by outperformance on revenue, better segment mix, and favorable price. For the full year fiscal 2025, adjusted EPS was $10.53, up 7% and well over $1 better than the midpoint of the initial guidance.

Publication Date: Nov -07

📋 Highlights
  • Q4 Sales & Earnings Outperformance:: Reported sales up 14% YoY, organic growth of 13%, with adjusted EPS at $3.34, exceeding expectations and reflecting 34% growth under new adjusted metrics.
  • Structural Productivity Savings:: Exceeded $250M target with $325M in savings, while free cash flow hit record $1.4B (114% conversion) in fiscal 2025.
  • Segment Margin Expansion:: Software & Control margin surged 880 bps to 31.2% on 30% organic sales growth, driving overall segment margins to 22.5%.
  • 2026 Guidance & Margin Targets:: Aims for 40%+ incremental margin, 21.5% segment margin (up 100+ bps YoY), and adjusted EPS of $11.70 (midpoint), with margin benefits from Sensia dissolution.
  • Asbestos Charge Impact:: One-time $136M pretax charge ($0.91/share) in Q4 due to accounting policy changes, but full-year EPS growth remained unchanged under new adjusted definitions.

Segment Performance

The Intelligent Devices segment margin was 19.8%, down 90 basis points year-over-year. Software & Control margin was 31.2%, up 880 basis points, driven by 30% organic sales growth and good price realization. Lifecycle Services margin was 17.5%, up 30 basis points year-over-year. As Blake Moret, Chairman and CEO, noted, the strength in product businesses and large software and services wins contributed to the company's strong performance.

Guidance and Outlook

For fiscal 2026, Rockwell expects reported sales growth of 3-7%, with a midpoint assuming a sequential sales decline in Q1, followed by gradual improvement. The company expects segment margin expansion of over 100 basis points and adjusted EPS of $11.70 at the midpoint. Organic sales growth guidance is 2% to 6%, with a reported revenue growth expected to be 5% at the midpoint.

Valuation and Metrics

With a P/E Ratio of 43.2 and EV/EBITDA of 28.19, the market appears to be pricing in significant growth expectations. The company's ROE of 28.15% and ROIC of 13.93% indicate strong profitability. The actual EPS of $3.34 beat estimates of $2.94, demonstrating the company's ability to exceed expectations. The dividend yield of 1.41% and free cash flow yield of 3.15% provide a relatively attractive return for investors.

Key Drivers and Challenges

The dissolution of the Sensia joint venture is expected to reduce reported revenue but increase margin percentage, with an approximate margin benefit to Rockwell of 50 basis points. The company expects auto to grow mid-single digits in fiscal '26, after stabilizing in fiscal '25. Warehouse and e-commerce are expected to continue growing, driven by shared contributions across the company. Inflation is expected to remain minimal in fiscal '26, and tariff-based pricing is expected to be EPS neutral.

3. NewsRoom

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Rockwell Automation, Inc. (ROK) Hit a 52 Week High, Can the Run Continue?

Dec -01

Source: zacks.com

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Miss These Genesis Mission Stocks, and You’ll Regret It for a Decade

Dec -01

Source: investorplace.com

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5 Stocks With Strong Sales Growth to Bet on Amid Volatile Markets

Nov -25

Source: zacks.com

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Rockwell Automation: Back On Offense And A Compelling Valuation (Rating Upgrade)

Nov -24

Source: seekingalpha.com

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FLEX vs. ROK: Which Stock Should Value Investors Buy Now?

Nov -20

Source: zacks.com

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Rockwell Automation, Inc. (ROK) Analyst/Investor Day Transcript

Nov -19

Source: seekingalpha.com

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Rockwell Automation to Build New Greenfield Manufacturing Site in Southeastern Wisconsin

Nov -18

Source: businesswire.com

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Bedell Frazier Investment Counselling LLC Lowers Stake in Rockwell Automation, Inc. $ROK

Nov -18

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.79%)

6. Segments

Intelligent Devices

Expected Growth: 10.3%

Rockwell Automation’s Intelligent Devices segment is expected to grow driven by increasing adoption of IoT and Industry 4.0, rising demand for industrial automation and control systems, and growing need for real-time data analytics and insights.

Lifecycle Services

Expected Growth: 7.3%

Rockwell Automation's Lifecycle Services growth is driven by increasing adoption of Industry 4.0, rising need for operational efficiency, and growing demand for remote monitoring and predictive maintenance.

Software & Control

Expected Growth: 11.5%

Rockwell Automation's industrial automation and software solutions drive growth, fueled by Industry 4.0 and IoT adoption, increasing demand for smart manufacturing and process optimization.

7. Detailed Products

Control and Visualization Software

FactoryTalk software suite for control, visualization, and MES solutions

Programmable Logic Controllers (PLCs)

Allen-Bradley PLCs for discrete and process control applications

Human-Machine Interfaces (HMIs)

FactoryTalk View ME and SE software for HMI applications

Industrial Control and I/O Systems

Allen-Bradley ControlLogix and CompactLogix control systems

Safety and Security Solutions

TÜV-certified safety controllers and software for functional safety

Industrial Data Analytics and AI

FactoryTalk InnovationSuite for industrial data analytics and AI

Industrial Networking and Security

Stratix switches and network security solutions for industrial networks

Power Distribution and Control

Industrial power distribution and control solutions, including circuit breakers and motor control

Industrial Robots and Machine Safety

Integrated control and safety solutions for industrial robots and machinery

8. Rockwell Automation, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Rockwell Automation, Inc. operates in the industrial automation and control systems industry, where substitutes may exist in the form of alternative automation solutions or manual processes. However, the company's comprehensive product portfolio and strong brand reputation make it a preferred choice for many customers, reducing the threat of substitutes.

Bargaining Power Of Customers

Rockwell Automation's customers are primarily large industrial and manufacturing companies that require specialized automation solutions. These customers often have limited bargaining power due to the company's expertise and the high cost of switching to alternative solutions.

Bargaining Power Of Suppliers

Rockwell Automation sources components and materials from various suppliers. While some suppliers may have significant bargaining power due to their market position or unique products, the company's large volume purchases and long-term relationships with suppliers help to mitigate this risk.

Threat Of New Entrants

The industrial automation and control systems industry has significant barriers to entry, including high R&D costs, complex product development, and stringent regulatory requirements. This limits the threat of new entrants and provides a relatively stable competitive environment for Rockwell Automation.

Intensity Of Rivalry

The industrial automation and control systems industry is highly competitive, with several established players competing for market share. Rockwell Automation faces intense rivalry from companies like Siemens, ABB, and Schneider Electric, which can lead to pricing pressure and reduced profit margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 53.91%
Debt Cost 4.33%
Equity Weight 46.09%
Equity Cost 10.63%
WACC 7.23%
Leverage 116.96%

11. Quality Control: Rockwell Automation, Inc. passed 5 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

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AMETEK

A-Score: 5.4/10

Value: 1.7

Growth: 6.1

Quality: 8.1

Yield: 1.0

Momentum: 6.0

Volatility: 9.3

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Xylem

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Yield: 2.0

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Value: 0.0

Growth: 6.8

Quality: 6.7

Yield: 0.0

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A-Score: 5.0/10

Value: 2.6

Growth: 5.7

Quality: 7.4

Yield: 1.0

Momentum: 3.0

Volatility: 10.0

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Rockwell Automation

A-Score: 4.9/10

Value: 1.2

Growth: 3.8

Quality: 6.1

Yield: 3.0

Momentum: 7.5

Volatility: 7.7

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A-Score: 4.3/10

Value: 1.8

Growth: 7.6

Quality: 6.6

Yield: 0.0

Momentum: 2.5

Volatility: 7.3

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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

404.29$

Current Price

404.29$

Potential

-0.00%

Expected Cash-Flows