Rockwell Automation Attains 52-Week High - Analyst Blog

Shares of Rockwell Automation, Inc. ROK reached a new 52-week high of $125.20 on Mar 10, up from its previous high of $124.78.

The stock closed at $123.74 at the end of trading yesterday, with a solid one-year return of about 39% and year-to-date return of about 5.2%, outperforming the S&P 500. The average volume of shares traded over the last three months was roughly 788K.

Based in Milwaukee, Wis., this provider of automation equipment has beaten the Zacks Consensus Estimate in the trailing four quarters with an average surprise of 6.16%. Rockwell Automation has a market cap of $17.2 billion and long-term expected earnings growth of 30%.

Growth Drivers

On Jan 29, Rockwell Automation reported first-quarter fiscal 2014 adjusted earnings of $1.47 per share, up 20% from $1.23 earned in the prior-year quarter. The results beat the Zacks Consensus Estimate of $1.39.

Rockwell Automation raised its organic revenue growth in the range of 3%–6% for fiscal 2014 from 2%–6%. The company also modified adjusted earnings per share in the range of $6.00–$6.35 for the full year, as against $5.95–$6.35 projected earlier. The company also expects free-cash flow conversion to be about 100% of adjusted income primarily due to acquisition opportunities.

The company recently closed two important acquisitions, namely vMonitor and Jacobs Automation. Both these acquisitions will add specialized technology to the company's resources and aid in expansion of footprint.

Moreover, we believe that Rockwell Automation will benefit from expansion in emerging markets and opportunistic acquisitions. Additionally, its strong balance sheet position and free cash flow, along with dividends and share repurchases are expected to generate long-term shareholder value.

Currently, Rockwell Automation carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Some better-ranked stocks in the same sector include Kadant Inc. KAI, Sun Hydraulics Corp. SNHY and Altra Industrial Motion Corp. AIMC. While Kadant and Sun Hydraulics sport a Zacks Rank #1 (Strong Buy), Altra Industrial Motion has a Zacks Rank #2 (Buy).