Regal Rexnord
RRX
$173.42
-2.57%
Regal Rexnord Corporation is a global industrial manufacturer that engineers and produces powertrain solutions, power transmission components, electric motors, electronic controls, air-moving products, and specialty electrical systems. The company operates through three segments—Automation & Motion Control (AMC), Industrial Powertrain Solutions (IPS), and Power Efficiency Solutions (PES)—with IPS being the largest revenue contributor. As a diversified industrial player, Regal Rexnord holds a strong market position across automation, motion control, and power efficiency niches, serving customers in North America, Europe, Asia, and other regions. The current investor narrative centers on the company's ongoing integration of acquisitions, margin improvement initiatives, and the impact of cyclical industrial demand, with recent stock volatility reflecting concerns about near-term growth and macroeconomic headwinds.…
RRX
Regal Rexnord
$173.42
Investment Opinion: Should I buy RRX Today?
Based on the data, RRX is rated a Buy. The consensus Strong Buy rating and average target of $262.60 imply substantial upside, and the forward PE of 13.6x is attractive for a company with expected EPS growth of over 20%. The PEG of 0.77 further supports undervaluation. The company's revenue growth of 4.3% and free cash flow of $805M provide a solid foundation for earnings expansion.
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RRX 12-Month Price Forecast
The AI assessment is bullish, driven by the compelling valuation and strong analyst sentiment. The low forward PE and PEG suggest the market is undervaluing RRX's earnings potential. However, the recent price decline and high debt levels temper confidence. If the company delivers on its EPS estimates, the stock should appreciate significantly. Key developments to watch include quarterly earnings, margin trends, and any changes in analyst targets. A downgrade would occur if revenue growth stalls or margins fail to improve.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Regal Rexnord's 12-month outlook, with a consensus price target around $249.00 and implied upside of +43.6% versus the current price.
Average Target
$249.00
0 analysts
Implied Upside
+43.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$220 - $275
Analyst target range
Regal Rexnord is covered by 10 analysts, with a consensus recommendation of 'Strong Buy' and a mean recommendation score of 1.27 (where 1 is Strong Buy and 5 is Sell). The average target price is $262.60, implying an upside of approximately 46.7% from the current price of $179.02. The target price range is $240.00 to $300.00, with the low target still representing a 34.1% upside, indicating that even the most bearish analyst sees significant value in the stock. The consensus is overwhelmingly bullish, with no Hold or Sell ratings reported, and recent actions from firms like Citigroup, JP Morgan, and Barclays have all been positive (Buy or Overweight), suggesting strong institutional conviction.
Bulls vs Bears: RRX Investment Factors
The bull case for RRX rests on a compelling valuation (forward PE 13.6x, PEG 0.77), strong analyst conviction (Strong Buy, 46.7% upside), and improving revenue growth. The bear case highlights the recent price collapse, high debt, and modest growth that could disappoint if macro conditions worsen. Currently, the evidence slightly favors the bulls due to the significant upside to analyst targets and the low forward multiple, but the stock's momentum is clearly negative. The key tension is whether the expected earnings recovery (implied by the forward PE) will materialize, as a miss could trigger further downside toward the 52-week low.
Bullish
- Strong Buy consensus with 46.7% upside: All 10 analysts rate RRX a Strong Buy, with an average target of $262.60, implying 46.7% upside from the current $179.02. Even the lowest target of $240.00 offers 34.1% upside, reflecting high conviction in the company's earnings recovery.
- Forward PE of 13.6x is attractive: The forward PE of 13.63x is well below the trailing PE of 33.25x, indicating the market expects significant EPS growth. With a PEG of 0.77, the stock trades at a discount to its expected growth, suggesting undervaluation relative to its earnings potential.
- Revenue growth accelerating to 4.3%: Q1 2026 revenue grew 4.3% YoY to $1.479B, up from the prior year's quarter. This marks a modest acceleration from the 1.1% growth in Q4 2025, indicating improving demand across its industrial segments.
- Strong free cash flow generation: TTM free cash flow stands at $805.1M, providing ample liquidity for debt reduction, dividends, and strategic acquisitions. This supports the company's ability to fund growth initiatives and return capital to shareholders.
Bearish
- Sharp 15.4% monthly price decline: RRX fell 15.4% in the past month, underperforming the S&P 500 by 18.2 percentage points. This significant drop suggests investor concerns about near-term earnings or macro headwinds, and the stock now sits near its 52-week low.
- High debt load with D/E of 0.74: Debt-to-equity of 0.74 indicates a leveraged balance sheet, with interest expenses of $80.5M in Q1 2026 consuming a significant portion of operating income. Rising interest rates could pressure earnings further.
- Trailing PE of 33.3x is expensive: Despite the low forward PE, the trailing PE of 33.25x is elevated, reflecting the current earnings trough. If the expected earnings recovery fails to materialize, the stock could face de-rating.
- Revenue growth remains modest at 4.3%: While growth is positive, it is far from explosive. The industrial sector is cyclical, and a slowdown in manufacturing or capital spending could easily stall this growth, making the stock vulnerable to economic downturns.
RRX Technical Analysis
Regal Rexnord's stock has exhibited a volatile yet upward long-term trend, with a 1-year price change of +22.92%, though it has pulled back sharply from its 52-week high of $247.80. Currently trading at $179.02, the stock sits at approximately 72% of its 52-week range (calculated as (179.02 - 127.96) / (247.80 - 127.96)), indicating it is closer to the lower end of its yearly range. This positioning suggests the stock has given back a significant portion of its gains, potentially offering a value opportunity if the pullback is overdone, or signaling a deteriorating trend if the decline continues.
Beta
1.07
1.07x market volatility
Max Drawdown
-27.2%
Largest decline past year
52-Week Range
$128-$248
Price range past year
Annual Return
+24.8%
Cumulative gain past year
| Period | RRX Return | S&P 500 |
|---|---|---|
| 1m | -19.3% | +2.4% |
| 3m | -17.3% | +4.7% |
| 6m | -22.6% | +11.7% |
| 1y | +24.8% | +21.3% |
| ytd | +18.7% | +13.4% |
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RRX Fundamental Analysis
Regal Rexnord's revenue has shown modest growth, with the most recent quarter (Q1 2026) reporting revenue of $1,479.1 million, a 4.3% increase year-over-year. This growth is consistent with the prior quarter's revenue of $1,523.2 million, though it represents a slight sequential decline. Over the past five quarters, revenue has ranged from $1,418.1 million to $1,523.2 million, indicating a stable but not accelerating growth trajectory. The company's revenue is diversified across segments, with Industrial Powertrain Solutions contributing $654.5 million, Automation and Motion Control $461.0 million, and Power Transmission Solutions $374.2 million, though the latter appears to be a subset of IPS. The modest growth suggests a mature industrial business with limited top-line expansion, which may be a concern for investors seeking higher growth.
Quarterly Revenue
$1.5B
2026-03
Revenue YoY Growth
+4.3%
YoY Comparison
Gross Margin
37.2%
Latest Quarter
Free Cash Flow
$805100000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is RRX Overvalued?
Given that Regal Rexnord is profitable, the primary valuation metric selected is the price-to-earnings (PE) ratio. The trailing PE is 33.25x, while the forward PE is 13.63x, indicating that the market expects significant earnings growth in the coming year. This wide gap between trailing and forward PE suggests that analysts anticipate a substantial improvement in profitability, likely driven by margin expansion and cost synergies from recent acquisitions. The PEG ratio of 0.77 further supports the view that the stock is attractively valued relative to its expected growth rate, as a PEG below 1 typically indicates undervaluation.
PE
33.3x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 13x~80x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
11.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are notable: RRX carries a debt-to-equity ratio of 0.74, and interest expenses of $80.5M in Q1 2026 consumed over half of operating income. The company's net margin is thin at 4.7%, leaving little room for error. While free cash flow is positive at $805M, the high leverage amplifies the impact of any earnings shortfall. Additionally, the trailing PE of 33.3x suggests the market is pricing in a significant earnings rebound; if that fails, the stock could de-rate sharply.