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Rockwell Automation (ROK), Ansys Team to Boost Industrial Operations

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Rockwell Automation, Inc. (ROK - Free Report) has teamed up with the global leader in engineering simulation — Ansys, Inc. (ANSS - Free Report) — to fortify its industrial operations with the latter’s Studio 5000 Simulation Interface. This will provide the automation and process engineers new alternative ways to use simulation, in order to improve the design, deployment, and performance of industrial operations. These include creating and testing equipment designs, virtual commissioning of equipment, changing the testing process, calculating the remaining life of components and providing operator training.

The Studio 5000 Simulation Interface connects Rockwell Automation’s industrial control systems with simulation and modeling tools. This new tool now connects with Ansys’ Twin Builder software to create simulation-based digital replicas of physical assets. The software uses multi-physics to detect how equipment performance and health is impacted by mechanical stress, flow rates and thermal profiles.

Users can now simulate complex physical processes and give precise inputs to the control system by connecting the industrial control system to Ansys’ Twin Builder software. This also provides detailed insights throughout the equipment lifecycle. The Studio 5000 Simulation Interface helps users move faster from conceptual designs to physical equipment at a lesser cost. It also enables users to connect a digital replica to an emulated or physical controller.

Rockwell Automation is well poised to benefit from its focus on broadening the portfolio of hardware and software products, solutions and services. Significant investments to globalize manufacturing, product development, building channel capability and partner network will also fuel growth.

The company is likely to witness above-market growth by expanding its served markets and improving offerings. Higher levels of infrastructure spending and a growing middle-class population will fuel demand for consumer products in the emerging markets. This will require manufacturing investments and open up additional growth channels for the company. Rockwell is focused on buyouts that will augment its information solutions and high-value services offerings and capabilities, while expanding the company’s global presence.

During its third-quarter fiscal 2021 conference call, the company raised the adjusted earnings per share guidance for fiscal 2021 to $9.10-$9.30 from the previous estimate of $8.95-$9.35. Management projects reported sales growth of 12% compared with the previous guidance of 9-12%. Organic sales growth is projected at 8%, higher than the prior expectation of 5.5-8.5%. Inorganic sales growth is estimated to be 1.5% for the fiscal year.  The upbeat guidance is driven by the company’s strong performance, year to date, and robust demand for core automation platforms and Information Solutions & Connected Services (IS/CS).

Share Price Performance

Rockwell Automation's shares have gained 26.4%, outperforming the industry’s growth of 25%, year to date.

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Zacks Rank & Stocks to Consider

Rockwell Automation currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the Industrial Products sector include Encore Wire Corporation (WIRE - Free Report) and Deere & Company (DE - Free Report) , each carry a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Encore Wire has a projected earnings growth rate of 332.6% for fiscal 2021. So far this year, the company’s shares have gained 45%.

Deere has an estimated earnings growth rate of 117.5% for fiscal 2021. The company’s shares have rallied 36.3%, so far this year.