Regal Rexnord (NYSE:RRX) Stock Jumps 10.8% on Strong Earnings

Key Points

• Regal Rexnord shares jumped 10.8% after the company reported quarterly EPS of $2.90, beating estimates of $2.65, while revenue reached $1.59 billion versus the $1.56 billion consensus. Revenue increased 6.1% year over year.
• The company declared a quarterly dividend of $0.35, equivalent to $1.40 annually and a 0.8% yield, with a payout ratio of 28.87%.
• Analysts maintain a generally positive view, with eight Buy ratings and three Holds, producing a “Moderate Buy” consensus and an average price target of $230.50. Institutional investors and hedge funds own 99.72% of the stock.

Regal Rexnord Corporation (NYSE:RRX - Get Free Report) shares rose 10.8% on Tuesday following a better than expected earnings announcement. The company traded as high as $175.99 and last traded at $178.2390. Approximately 778,543 shares were traded during mid-day trading, a decline of 32% from the average session volume of 1,137,037 shares. The stock had previously closed at $160.93.

The company reported $2.90 earnings per share for the quarter, topping the consensus estimate of $2.65 by $0.25. Regal Rexnord had a return on equity of 9.93% and a net margin of 5.35%. The firm had revenue of $1.59 billion during the quarter, compared to analysts' expectations of $1.56 billion. During the same period in the previous year, the business posted $2.51 EPS. The company's quarterly revenue was up 6.1% compared to the same quarter last year.

Regal Rexnord Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, January 14th. Investors of record on Thursday, December 31st will be issued a $0.35 dividend. This represents a $1.40 dividend on an annualized basis and a yield of 0.8%. The ex-dividend date is Thursday, December 31st. Regal Rexnord's dividend payout ratio is currently 28.87%.

Analysts Set New Price Targets

Several brokerages recently issued reports on RRX. JPMorgan Chase & Co. decreased their price objective on Regal Rexnord from $240.00 to $196.00 and set an "overweight" rating for the company in a research report on Friday, October 9th. The Goldman Sachs Group set a $216.00 price objective on shares of Regal Rexnord in a research report on Wednesday, September 30th. Citigroup dropped their price objective on shares of Regal Rexnord from $220.00 to $200.00 and set a "buy" rating on the stock in a report on Monday, October 12th. Weiss Ratings reaffirmed a "hold (c)" rating on shares of Regal Rexnord in a research report on Thursday, October 15th. Finally, Deutsche Bank Aktiengesellschaft began coverage on shares of Regal Rexnord in a research note on Monday, July 20th. They issued a "buy" rating and a $286.00 target price for the company. Eight research analysts have rated the stock with a Buy rating and three have issued a Hold rating to the stock. According to MarketBeat.com, the company has an average rating of "Moderate Buy" and an average target price of $230.50.

Institutional Inflows and Outflows

Large investors have recently bought and sold shares of the stock. Clearstead Trust LLC acquired a new stake in Regal Rexnord during the second quarter worth approximately $25,000. Mitsubishi UFJ Asset Management Co. Ltd. acquired a new stake in Regal Rexnord during the 2nd quarter worth approximately $27,000. Northwestern Mutual Wealth Management Co. acquired a new stake in Regal Rexnord during the 2nd quarter worth approximately $43,000. FNY Investment Advisers LLC bought a new stake in Regal Rexnord in the 2nd quarter valued at $43,000. Finally, Keating Financial Advisory Services Inc. acquired a new position in Regal Rexnord in the 2nd quarter valued at $46,000. 99.72% of the stock is owned by institutional investors and hedge funds.

Regal Rexnord Trading Up 10.6%

The company has a debt-to-equity ratio of 0.66, a quick ratio of 1.16 and a current ratio of 2.28. The stock has a market capitalization of $11.85 billion, a price-to-earnings ratio of 36.71, a price-to-earnings-growth ratio of 1.28 and a beta of 1.09. The business has a fifty day simple moving average of $157.73 and a 200 day simple moving average of $189.29.

Regal Rexnord Company Profile

Regal Rexnord Corporation is an industrial manufacturing company that develops and produces electric motors, power transmission components, motion-control systems and other equipment used in industrial and commercial applications. Its products include motors, gearboxes, bearings, couplings, belts, chains, drives, clutches, brakes and related controls, as well as air-moving and power-management solutions.

The company serves customers across industries such as automation, material handling, food and beverage, renewable energy, heating and ventilation, agriculture, and general industrial production.

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