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Regal Beloit (RRX) Hits 52-Week High, Can the Run Continue?
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Shares of Regal Rexnord (RRX - Free Report) have been strong performers lately, with the stock up 7% over the past month. The stock hit a new 52-week high of $176.22 in the previous session. Regal Rexnord has gained 3.3% since the start of the year compared to the 1% move for the Zacks Industrial Products sector and the 1.4% return for the Zacks Manufacturing - Electronics industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 2, 2021, Regal Beloit reported EPS of $2.36 versus consensus estimate of $2.34 while it missed the consensus revenue estimate by 0.19%.
For the current fiscal year, Regal Beloit is expected to post earnings of $10.23 per share on $3.8 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $11.43 per share on $5.1 billion in revenues. This represents a year-over-year change of 16.64% and 34.21%, respectively.
Valuation Metrics
Regal Beloit may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Regal Beloit has a Value Score of B. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 17.2X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 19.5X versus its peer group's average of 26.5X. Additionally, the stock has a PEG ratio of 1.72. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Regal Beloit currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Regal Beloit passes the test. Thus, it seems as though Regal Beloit shares could still be poised for more gains ahead.
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Regal Beloit (RRX) Hits 52-Week High, Can the Run Continue?
Shares of Regal Rexnord (RRX - Free Report) have been strong performers lately, with the stock up 7% over the past month. The stock hit a new 52-week high of $176.22 in the previous session. Regal Rexnord has gained 3.3% since the start of the year compared to the 1% move for the Zacks Industrial Products sector and the 1.4% return for the Zacks Manufacturing - Electronics industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 2, 2021, Regal Beloit reported EPS of $2.36 versus consensus estimate of $2.34 while it missed the consensus revenue estimate by 0.19%.
For the current fiscal year, Regal Beloit is expected to post earnings of $10.23 per share on $3.8 billion in revenues. Meanwhile, for the next fiscal year, the company is expected to earn $11.43 per share on $5.1 billion in revenues. This represents a year-over-year change of 16.64% and 34.21%, respectively.
Valuation Metrics
Regal Beloit may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Regal Beloit has a Value Score of B. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 17.2X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 19.5X versus its peer group's average of 26.5X. Additionally, the stock has a PEG ratio of 1.72. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Regal Beloit currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Regal Beloit passes the test. Thus, it seems as though Regal Beloit shares could still be poised for more gains ahead.