August 8, 2018

ROK – Market expectations are for Uniform ROA expansion, and management is confident in their Connected Enterprise strategy and growth prospects in high-margin segments


  • Rockwell Automation, Inc. (ROK:USA)is currently trading near recent averages relative to UAFRS-based (Uniform) Earnings, with an 18.0x Uniform P/E. At these levels, the market has bullish expectations for the firm, while management is confident in their Connected Enterprise initiative and growth in their high-margin heavy industrials segment
  • Specifically, management is confident that strong macro-tailwinds in industrial products will continue for the foreseeable future, driving demand higher in their high-margin heavy industrials business segment. Additionally, management is confident that their Connected Enterprise strategy will continue to drive strong results, and they raised their dividend by 10% as a result. Furthermore, they are confident that they will be able to continue strong growth across the spectrum in China, and that ABB’s recent acquisition of B&R will not drastically increase competition. Finally, management generated an excitement marker when talking about their growth prospects in vertical markets, particularly within heavy industries

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