RBC – Market expectations are for Uniform ROA compression, but management is confident about productivity, margins, and inventory

• Regal Beloit Corporation (RBC:USA) trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 14.5x Uniform P/E. At these levels, the market has bearish expectations for the firm, but management is confident about their productivity improvements, margins, and inventory adjustment
• Specifically, management is confident all of their segments have opportunities to improve product management and margins, and they are confident they are accelerating productivity improvements. Furthermore, they are confident their inventory adjustment will not materially impact profitability