Rockwell Automation (ROK) Hits 52-Week High: What's Driving It?
Shares of Rockwell Automation, Inc. ROK scaled a new 52-week high of $303.20 on Mar 3 before closing the session a tad lower at $302.59. This came following the announcement of Rockwell Automation acquiring Knowledge Lens on Mar 1.
ROK currently has a market capitalization of $34.7 billion and a Zacks Rank #2 (Buy).
In the past year, Rockwell Automation’s shares have gained 14.3% compared with the industry’s growth of 11.9%.
Image Source: Zacks Investment Research
Driving Factors
Rockwell Automation delivered improvement in the bottom and top lines in the first quarter of fiscal 2023, aided by higher sales volume and positive price/cost.
The company has been benefiting from improved order levels over the past few quarters. Solid underlying demand from customers across many industries and regions has been driving low order cancellation rates. Moreover, huge capital investments across many end markets, coupled with higher automation and digital transformation, have been supporting solid order levels across all segments.
Sales from Information Solutions and Connected Services are gaining from strong order wins from software and infrastructure services. Customers in life sciences, food and beverage, mining and many other end markets rely on Rockwell Automation to provide robust network technology and real-time domain expertise to keep their critical operations secure and resilient. ROK’s Life Sciences solutions business is well-placed to gain from a wide range of product offerings and Sensis JV.
Even though the company’s top line has been bearing the brunt of supply-chain challenges and cost inflation, this has been offset by solid backlog levels.
Moreover, Rockwell Automation has been focused on buyouts, which will augment its information solutions, and high-value services offerings and capabilities, while expanding its global presence or enhancing process expertise.
Recently, it acquired a services and solutions provider based in India, Knowledge Lens. The addition of Knowledge Lens will expand Rockwell’s capabilities to harness the power of data and enable autonomous manufacturing.
Backed by these tailwinds, Rockwell Automation reported net sales of $1,981 million in the first quarter of fiscal 2023. The figure marks growth of 6.7% from the prior-year quarter. The top line beat the Zacks Consensus Estimate of $1,892 million. The company reported adjusted earnings per share of $2.46, surpassing the Zacks Consensus Estimate of $1.81. The bottom line rose 15% year over year.
Earnings estimates for Rockwell Automation have also been going up over the past two months. The Zacks Consensus Estimate for fiscal 2023 bottom line has increased 4.4% and the same for fiscal 2024 has moved up 2.2%. The consensus estimate for fiscal second-quarter 2023 earnings has also been revised 1.6% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Other Stocks to Consider
Some other top-ranked stocks from the Industrial Products sector are OI Glass OI, Tenaris TS and Dover DOV. OI and TS flaunt a Zacks Rank #1 (Strong Buy) at present, and DOV has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
OI Glass has an average trailing four-quarter earnings surprise of 16.4%. The Zacks Consensus Estimate for OI’s 2023 earnings is pegged at $2.57 per share. This indicates an 11.7% increase from the prior-year reported figure. The consensus estimate for 2023 earnings has moved 16% north in the past 60 days. OI’s shares gained 102.1% in the last year.
Tenaris has an average trailing four-quarter earnings surprise of 11.5%. The Zacks Consensus Estimate for TS’ 2023 earnings is pegged at $6.12 per share. This indicates a 41.3% increase from the prior-year reported figure. The consensus estimate for 2023 earnings has moved north by 18.1% in the past 60 days. Its shares gained 22.4% in the last year.
The Zacks Consensus Estimate for Dover’s fiscal 2023 earnings per share is pegged at $8.99, suggesting an increase of 6.4% from that reported in the last year. The consensus estimate for fiscal 2023 earnings moved 1.2% upward in the last 60 days. DOV has a trailing four-quarter average earnings surprise of 2.3%. Its shares gained 5.3% in the last year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
O-I Glass, Inc. (OI) : Free Stock Analysis Report
Dover Corporation (DOV) : Free Stock Analysis Report
Rockwell Automation, Inc. (ROK) : Free Stock Analysis Report
Tenaris S.A. (TS) : Free Stock Analysis Report
