Rockwell Automation (1ROK) AI Stock Analysis

Company Guidance

For fiscal 2027, Rockwell expects organic sales growth in the 6%-9% range, or 7.5% at the midpoint, including a 100 basis point benefit from the fiscal year 2026 customer tariff refund program accrual, with strong growth at the midpoint of the guide at 6.5%; the Sensia divestiture represents about a point and a half headwind to reported growth, resulting in expected reported sales growth of about 6% at the midpoint. Annual recurring revenue is expected to grow 7%, enterprise operating margin guidance is 23%, up almost 100 basis points year-over-year, adjusted EPS guidance is $14.50-$15.50, or $15.00 at the midpoint, free cash flow conversion is expected to be 100%, underlying price is expected to be 300 basis points, incremental margins are expected to be in the high 30s, CapEx spending is targeted at about 4% of sales, and net tariff refund-related items are expected to be an $0.11 headwind. In Q1, total company sales are expected to be up mid-single-digits organically year-over-year, or up low single-digits on a reported basis, with organic incrementals in the mid-30s and adjusted EPS of around $3.00 per share; Intelligent Devices sales are expected to be up mid-single-digits with segment margins up slightly, Software & Control organic sales are expected to grow 10% with margin in the low 30s and incremental margins in the low 40s, and Lifecycle Services organic sales are expected to be up slightly while reported sales will be down high single-digits. Full-year Intelligent Devices sales are expected to grow mid-single-digits with segment margin expanding about 100 basis points, Software & Control sales growth is expected to be high single-digits with margins up slightly, and Lifecycle Services organic sales growth is expected to be up low single-digits with segment margin up about 100 basis points; corporate and other expense is expected to be around $120 million, net interest expense about $120 million, average diluted shares outstanding about 110.4 million, planned share repurchases approximately $600 million, and adjusted effective tax rate 20%.