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Here's Why It is Worth Investing in RBC Bearings (ROLL) Now

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RBC Bearings Incorporated ROLL currently boasts robust prospects on strength in its businesses, acquired assets and a sound capital-deployment strategy.

Zacks Investment Research
Zacks Investment Research


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The currently Zacks Rank #1 (Strong Buy) player has a market capitalization of $5.7 billion. In the past month, the stock has gained 10.7% against the industry’s decline of 4.1%.

Let’s delve into the factors that make investments in ROLL a smart choice at the moment.

Strength in End Markets: RBC Bearings’ diversified business structure and a strong portfolio of products help it mitigate the adverse impact of weakness in one end market with strength across the others. In the quarters ahead, ROLL will likely benefit from strength in its industrial business, supported by robust demand across its general industrial, mining, semiconductor and energy end markets. Its industrial segment sales increased 297.3% on a year-over-year basis in fourth-quarter fiscal 2022 (ended Apr 2, 2022).

Also, ROLL’s product development initiatives coupled with demand improvement for commercial aircraft components are expected to drive its performance over time. RBC Bearings expects its first-quarter fiscal 2023 (ending June 2022) revenues in the range of $355-$365 million (including the contribution from the DODGE buyout), indicating growth of 127.3-133.7% from the year-ago fiscal quarter’s reported figure.

Benefits From Acquisitions: ROLL strengthens and expands its businesses by adding assets. RBC Bearings’ acquisition of ABB Ltd’s ABB DODGE mechanical power transmission (November 2021) has been strengthening its customer base across the industrial, aerospace and defense markets for a while. The buyout also expanded ROLL’s product offerings. This acquisition will likely expand ROLL’s cash EPS by 40-60% in the initial year of completing the transaction.

Shareholder-Friendly Policies: ROLL remains committed to rewarding its shareholders through share-repurchase programs. In fiscal 2022 (ended Apr 2, 2022), RBC Bearings repurchased shares worth $8.5 million, reflecting an increase of 24.6% on a year-over-year basis. It is worth noting that its board of directors approved a $100-million share repurchase plan in May 2019. ROLL was left to repurchase shares worth $79.1 million under this program exiting fiscal 2022.

Northbound Estimate Revisions: In the past 60 days, the Zacks Consensus Estimate for fiscal 2023 (ending March 2023) earnings has moved up from $5.48 to $5.85 on two upward estimate revisions versus none downward. The consensus estimate for fiscal 2024 (ending March 2024) earnings has increased from $5.79 to $6.84 on two northward estimate revisions against none southward.

Other Stocks to Consider

Two other top-ranked companies from the industrial products sector are discussed below:

Applied Industrial Technologies, Inc. AIT presently sports a Zacks Rank of 1. AIT delivered a trailing four-quarter earnings surprise of 25.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

AIT’s earnings estimates have increased 5.9% for fiscal 2022 (ending June 2022) in the past 60 days. Its shares have declined 5.2% in the past month.

Nordson Corporation NDSN presently has a Zacks Rank of 2. Its earnings surprise in the last four quarters was 4.5%, on average.

In the past 60 days, NDSN’s earnings estimates have increased 3% for 2022 (ending October 2022). The stock has dipped 0.1% in the past month.


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