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RBC Bearings (ROLL) Up 10.1% in a Month: What's Driving it?
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RBC Bearings Incorporated’s performance has been impressive over the past month, which is evident from a 10.1% increase in its share price. Strength across its end market, solid product offerings, buyouts and strong capital-allocation strategies supported positive market sentiments for the company.
The Oxford, CT-based company, with $5.2 billion of market capitalization, belongs to the Zacks Manufacturing - General Industrial industry. It currently sports a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
Over the past month, RBC Bearings has outperformed its industry’s decline of 8.8% and the S&P 500’s fall of 7.3%.
Factors Favoring the Stock
RBC Bearings’ diversified business structure allows it to mitigate the adverse impacts of weakness in one end market with strength across others. The company has been benefiting from strength in its industrial business, driven by solid demand across its general industrial, mining, semiconductor and energy end markets. In fourth-quarter fiscal 2022 (ended Apr 2, 2022), the company’s industrial segment sales increased 297.3% on a year-over-year basis.
ROLL’s product development initiatives, coupled with an increase in demand for commercial aircraft components, are expected to drive its performance in the quarters ahead. Also, recovery in its OEM and aftermarket defense businesses is likely to be beneficial. For first-quarter fiscal 2023 (ending June 2022), it anticipates sales of $355-$365 million.
It remains focused on rewarding its shareholders through share-repurchase programs. In fiscal 2022, RBC Bearings used $8.5 million for repurchasing shares, an increase of 24.6% year over year. ROLL’s board of directors approved a $100-million share repurchase plan in May 2019. Exiting fiscal 2022, it was left to repurchase shares worth $79.1 million under the program.
The company intends to strengthen and expands its businesses through the addition of assets. Its buyout of ABB Ltd’s DODGE mechanical power transmission unit (November 2021) expanded its exposure, product offerings and customer base across industrial, aerospace and defense markets. The buyout of ABB arm is expected to expand ROLL’s cash EPS by 40-60% in the initial year of completing the transaction.
The Zacks Consensus Estimate for RBC Bearings’ earnings is pegged at $6.02 for fiscal 2023 (ending March 2023), up 9.9% from the 60-day-ago figure. The consensus estimate for first-quarter fiscal 2023 earnings stands at $1.41, having moved 14.6% north over the same time frame.
Other Key Picks
Some other top-ranked companies from the same space are discussed below:
AIT’s earnings estimates have increased 5.9% for fiscal 2022 (ending June 2022) in the past 60 days. The stock has declined 9.9% in the past month.
IDEX Corporation (IEX - Free Report) presently has a Zacks Rank of 2 (Buy). IEX delivered a trailing four-quarter earnings surprise of 2.8%, on average.
IDEX’s earnings estimates have increased 3.2% for 2022 in the past 60 days. Its shares have declined 6.5% in the past month.
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RBC Bearings (ROLL) Up 10.1% in a Month: What's Driving it?
RBC Bearings Incorporated’s performance has been impressive over the past month, which is evident from a 10.1% increase in its share price. Strength across its end market, solid product offerings, buyouts and strong capital-allocation strategies supported positive market sentiments for the company.
The Oxford, CT-based company, with $5.2 billion of market capitalization, belongs to the Zacks Manufacturing - General Industrial industry. It currently sports a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
Over the past month, RBC Bearings has outperformed its industry’s decline of 8.8% and the S&P 500’s fall of 7.3%.
Factors Favoring the Stock
RBC Bearings’ diversified business structure allows it to mitigate the adverse impacts of weakness in one end market with strength across others. The company has been benefiting from strength in its industrial business, driven by solid demand across its general industrial, mining, semiconductor and energy end markets. In fourth-quarter fiscal 2022 (ended Apr 2, 2022), the company’s industrial segment sales increased 297.3% on a year-over-year basis.
ROLL’s product development initiatives, coupled with an increase in demand for commercial aircraft components, are expected to drive its performance in the quarters ahead. Also, recovery in its OEM and aftermarket defense businesses is likely to be beneficial. For first-quarter fiscal 2023 (ending June 2022), it anticipates sales of $355-$365 million.
It remains focused on rewarding its shareholders through share-repurchase programs. In fiscal 2022, RBC Bearings used $8.5 million for repurchasing shares, an increase of 24.6% year over year. ROLL’s board of directors approved a $100-million share repurchase plan in May 2019. Exiting fiscal 2022, it was left to repurchase shares worth $79.1 million under the program.
The company intends to strengthen and expands its businesses through the addition of assets. Its buyout of ABB Ltd’s DODGE mechanical power transmission unit (November 2021) expanded its exposure, product offerings and customer base across industrial, aerospace and defense markets. The buyout of ABB arm is expected to expand ROLL’s cash EPS by 40-60% in the initial year of completing the transaction.
The Zacks Consensus Estimate for RBC Bearings’ earnings is pegged at $6.02 for fiscal 2023 (ending March 2023), up 9.9% from the 60-day-ago figure. The consensus estimate for first-quarter fiscal 2023 earnings stands at $1.41, having moved 14.6% north over the same time frame.
Other Key Picks
Some other top-ranked companies from the same space are discussed below:
Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank #1. AIT delivered a trailing four-quarter earnings surprise of 25.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
AIT’s earnings estimates have increased 5.9% for fiscal 2022 (ending June 2022) in the past 60 days. The stock has declined 9.9% in the past month.
IDEX Corporation (IEX - Free Report) presently has a Zacks Rank of 2 (Buy). IEX delivered a trailing four-quarter earnings surprise of 2.8%, on average.
IDEX’s earnings estimates have increased 3.2% for 2022 in the past 60 days. Its shares have declined 6.5% in the past month.