J.P. Morgan Comments On Rockwell Automation F3Q

According to J.P. Morgan, Rockwell Automation ROK saw a F3Q that reinforces the end of the early cycle, beat-and-raise leg of the stock story. J.P. Morgan said that there are project-related businesses here, and the bull case may try and pivot, calling ROK late cycle, but we reject even a debate here—the fact is that a portfolio already past prior peak revenue with earnings almost 4x off bottom cannot be late cycle. “The same dynamics also go against the secular growth thesis, especially as China growth moves lower. Relative to peers that offer similar macro exposure with more earnings upside late in the cycle, we continue to see a parity multiple to peers on FY12 (5-10% of further underperformance) as a more opportunistic level.” Rockwell Automation closed yesterday at $73.48.