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Regal Rexnord
(NYSE:RRX)
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Rating:56Neutral
Price Target:
$227.00
▲(6.70% Upside)
Action:Reiterated
Date:08/06/26
The score is driven primarily by steady operating profitability and improving (but still meaningful) leverage, offset by thin net margins and softer/volatile recent free cash flow. Technicals show an established uptrend but mixed momentum indicators. Valuation is the largest headwind given the high P/E and low yield, while the latest earnings call was constructive on orders and guidance but tempered by margin pressure excluding refunds and reduced cash-flow guidance.
Positive Factors
Operating profitability and margins
Regal Rexnord’s ~37% gross margin and ~20% EBITDA margin reflect durable operating leverage from engineered products and manufacturing scale. Strong core margins provide sustained reinvestment capacity for R&D, facility ramps (ePOD) and productivity initiatives, supporting competitiveness across cycles.
Negative Factors
Thin net margins and subdued ROE
Despite healthy operating margins, net margin is low (~4.8%) indicating meaningful below-the-line costs (interest, other items) that erode profitability available to shareholders. Subdued ROE (~4.2%) limits ability to generate strong equity returns and reduces buffer against demand or cost shocks over time.
Read all positive and negative factors
Positive Factors
Negative Factors
Operating profitability and margins
Regal Rexnord’s ~37% gross margin and ~20% EBITDA margin reflect durable operating leverage from engineered products and manufacturing scale. Strong core margins provide sustained reinvestment capacity for R&D, facility ramps (ePOD) and productivity initiatives, supporting competitiveness across cycles.
Read all positive factors
Regal Rexnord (RRX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.51B
Dividend Yield0.82%
Average Volume (3M)1.01M
Price to Earnings (P/E)35.0
Beta (1Y)1.21
Revenue Growth3.50%
EPS Growth29.04%
CountryUS
Employees28,950
SectorGeneral
Sector StrengthN/A
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)4.88
Shares Outstanding66,591,866
10 Day Avg. Volume771,535
30 Day Avg. Volume1,010,182
Financial Highlights & Ratios
PEG Ratio0.77
Price to Book (P/B)1.36
Price to Sales (P/S)1.57
P/FCF Ratio10.42
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$256.75Price Target Upside20.69% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)10.63
Revenue Forecast (FY)$6.20B
Regal Rexnord Business Overview & Revenue Model
Company Description
Regal Rexnord Corporation, formerly known as Regal Beloit Corporation, is a global enterprise that designs, manufactures, and distributes a comprehensive range of industrial products. Its offerings include industrial powertrain solutions, mechanic...
How the Company Makes Money
Regal Rexnord makes money primarily by manufacturing and selling engineered industrial components and systems. Its revenue is largely transaction-based, generated from the sale of products such as electric motors and motor systems, drives and cont...
Regal Rexnord Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Neutral
The call presents a mixed but constructive picture: strong order momentum (notably in AMC and IPS), solid near-term revenue growth and earnings aided by tariff refunds, continued deleveraging and on‑schedule strategic initiatives such as ePOD. Offsetting these positives are meaningful near-term margin pressures excluding refund benefits, weakened PES end markets (residential HVAC and pool), delayed productivity realization to protect service levels, inflationary cost pressure, and working capital headwinds that reduced cash flow guidance. Several positives improve visibility into 2027 (backlog and long-cycle wins), while execution and market mix create short-term challenges.Positive Updates
Enterprise Order Momentum
Orders rose 8.8% on a daily basis versus prior year (8.1% excluding data center). Orders excluding consumer-leaning businesses (residential HVAC and pool) were up low double digits. Enterprise orders in July were up 7% on a daily basis.
Negative Updates
PES Revenue Decline and Channel Weakness
Power Efficiency Solutions (PES) organic sales declined 6.6% year-over-year driven by weakness in residential HVAC and pool channels. PES orders growth (3.5%) was offset by residential and pool softness, and management lowered PES full-year sales guidance to a flat to low single-digit decline.
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Q2-2026 Updates
Positive
Negative
Enterprise Order Momentum
Orders rose 8.8% on a daily basis versus prior year (8.1% excluding data center). Orders excluding consumer-leaning businesses (residential HVAC and pool) were up low double digits. Enterprise orders in July were up 7% on a daily basis.
Read all positive updates
Company Guidance
Regal Rexnord left full‑year sales guidance unchanged at $6.2 billion (≈4.5% growth) and now forecasts adjusted EBITDA margin of 22.1% (21.3% excluding IEEPA tariff refunds), reflecting an expected $48 million EBITDA refund benefit ($0.57 per share) split as $32M recorded in Q2 and $8M in each back‑half quarter; adjusted EPS guidance midpoint remains $10.60 with a narrowed range of $10.35–$10.85; adjusted free cash flow guidance is $600 million (down $50M); management expects net debt leverage below 3.0x in the back half; segment changes include AMC sales raised to low‑double‑digit growth (from high‑single digits) and $15M of ePOD revenue now expected in Q4 (AMC margins to be higher in H2 than H1), IPS sales lowered to low‑single‑digit growth (from mid‑single digits) with ~80 bps margin headwind vs prior, and PES now guided to flat to low‑single‑digit sales decline with ~1 point lower EBITDA margin vs prior assumptions.Regal Rexnord Financial Statement Overview
Summary
Income Statement
67
Positive
Balance Sheet
56
Neutral
Cash Flow
52
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.06B | 5.93B | 6.03B | 6.25B | 5.22B | 3.81B |
| Gross Profit | 2.29B | 2.22B | 2.20B | 2.11B | 1.70B | 1.07B |
| EBITDA | 1.20B | 1.20B | 1.17B | 971.00M | 1.04B | 573.00M |
| Net Income | 324.00M | 279.50M | 196.20M | -57.40M | 488.90M | 229.60M |
Balance Sheet | ||||||
| Total Assets | 13.75B | 13.92B | 14.03B | 15.43B | 10.27B | 10.37B |
| Cash, Cash Equivalents and Short-Term Investments | 441.60M | 521.70M | 393.50M | 574.00M | 688.50M | 672.80M |
| Total Debt | 4.77B | 5.06B | 5.61B | 6.55B | 2.14B | 2.04B |
| Total Liabilities | 6.83B | 7.07B | 7.77B | 9.07B | 3.85B | 3.96B |
| Stockholders Equity | 6.92B | 6.84B | 6.26B | 6.34B | 6.39B | 6.37B |
Cash Flow | ||||||
| Free Cash Flow | 466.30M | 893.10M | 499.90M | 596.20M | 352.40M | 303.20M |
| Operating Cash Flow | 556.90M | 990.80M | 609.40M | 715.30M | 436.20M | 357.70M |
| Investing Cash Flow | -78.90M | -71.00M | 275.40M | -4.98B | -113.30M | -175.70M |
| Financing Cash Flow | -363.30M | -814.10M | -1.10B | 4.20B | -274.20M | -117.60M |
Regal Rexnord Technical Analysis
Negative
212.74
Price Trends
208.58
Negative
205.27
Negative
184.98
Negative
Market Momentum
-10.60
Positive
33.37
Neutral
2.78
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RRX, the sentiment is Negative. The current price of 212.74 is above the 20-day moving average (MA) of 196.87, above the 50-day MA of 208.58, and above the 200-day MA of 184.98, indicating a bearish trend. The MACD of -10.60 indicates Positive momentum. The RSI at 33.37 is Neutral, neither overbought nor oversold. The STOCH value of 2.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RRX.
Regal Rexnord Risk Analysis
Regal Rexnord disclosed 36 risk factors in its most recent earnings report. Regal Rexnord reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Regal Rexnord Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $12.90B | 33.42 | 18.56% | 0.63% | 17.13% | 23.21% | |
71 Outperform | $11.16B | 25.32 | 28.13% | 1.31% | 4.44% | 25.08% | |
69 Neutral | $8.51B | 17.41 | 26.96% | 2.34% | 0.39% | -0.01% | |
69 Neutral | $10.93B | 37.68 | 12.37% | ― | 20.63% | 27.00% | |
66 Neutral | $12.89B | 37.83 | 16.19% | 0.43% | 13.85% | 8.45% | |
56 Neutral | $11.51B | 34.95 | 4.74% | 0.66% | 3.50% | 29.04% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
RRX
Regal Rexnord
170.58
23.61
16.06%
DCI
Donaldson Company
95.71
22.13
30.08%
AOS
A. O. Smith Corporation
62.50
-8.44
-11.89%
SPXC
SPX
212.16
25.60
13.72%
WTS
Watts Water Technologies
383.05
110.64
40.61%
CR
Crane Company
219.04
29.03
15.28%
Regal Rexnord Corporate Events
Business Operations and StrategyExecutive/Board Changes
Regal Rexnord Names New Industrial Powertrain Solutions Leader
Positive
Jun 1, 2026
On June 1, 2026, Milwaukee-based Regal Rexnord announced that Mark Klossner has been appointed Executive Vice President President of its Industrial Powertrain Solutions segment, effective immediately. He succeeds Jerry Morton, who has led IPS sin...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.