This Analyst Raises Rockwell's Price Target On Demand Resiliency, Strong Incrementals

Oppenheimer analyst Noah Kaye reiterated Outperform rating on Rockwell Automation Inc (NYSE: ROK), raising the price target to $300 from $295.
Talking about the upside scenario, the analyst expects Rockwell to gain from the general improvement in industrial demand, particularly larger projects in emerging markets. These tailwinds and the company's diversified offerings will boost demand resiliency for Rockwell through the cycle.
Also Read: Rockwell Automation Q2 Earnings Top Estimates On Higher Sales Volume; Boosts FY23 Forecast
As chip supply continues to improve, management expects faster backlog conversion and book-bill ratios to migrate towards pre-supply crunch levels, resulting in FY23 orders of $9 billion and a backlog of $5 billion exiting FY23, the analyst notes.
The analyst applauds Rockwell's expanded pipeline during the industrial recovery that supports higher growth in future years.
Based on the above, the analyst raised the company's FY23 sales to $8.89 billion from $8.68 billion. FY23 adjusted EPS estimates increased to $11.91 from $11.20.
For FY24, the analyst raised estimates to $9.18 billion from $9.1 billion. Adjusted EPS estimate increased to $12.48 from $12.30.
Price Action: ROK shares traded higher by 0.01% at $283.65 on the last check Friday.

Analyst Calendar