Gold prices steady ahead of Fed decision; weekly weakness noted
On Thursday, Rockwell Automation (NYSE:ROK) received an upgrade from JPMorgan, shifting from an Underweight to a Neutral rating. Accompanying this change, the firm also increased the price target for Rockwell Automation to $271.00, up from the previous target of $201.00. The stock, currently trading at $283.17, has shown remarkable momentum with a 13.64% gain in the past week. According to InvestingPro analysis, the company appears to be trading above its Fair Value, with a P/E ratio of 35x.
The upgrade comes as JPMorgan acknowledges improvements in Rockwell Automation’s margins, which have been bolstered by cost reduction initiatives and manufacturing and SKU rationalization. Although the macroeconomic environment remains uncertain, and there isn’t a clear sign of inflection, the analyst noted that Rockwell Automation’s margins are showing a stronger base than previously anticipated. The company maintains a healthy gross profit margin of 39% and has demonstrated strong financial health, earning a "GOOD" overall rating from InvestingPro, which offers 12 additional exclusive insights about the company’s performance.
Looking ahead, Rockwell Automation has projected normalized incremental margins around 35% by 2026. JPMorgan suggests that the company could achieve above-average incremental margins if the economic cycle turns favorably. On the basis of these expectations, JPMorgan has revised its earnings per share (EPS) estimates for Rockwell Automation to $9.85 for 2025 and $10.85 for 2026.
The new price target of $271.00 reflects a 30% premium to the sector, indicating JPMorgan’s increased confidence in Rockwell Automation’s earnings recovery potential. This reassessment is predicated on the belief that there will be a cyclical recovery in earnings, which has been factored into the revised price target and rating.
Rockwell Automation’s stock adjustment follows the company’s efforts to streamline operations and manage costs effectively amidst a challenging economic landscape. The firm’s proactive measures appear to have laid a foundation for potential growth as market conditions evolve.
In other recent news, Rockwell Automation Inc. reported impressive financial results for the second quarter of 2025, exceeding analysts’ expectations. The company achieved an adjusted earnings per share (EPS) of $2.45, surpassing the projected $2.09, and reported actual revenue of $2 billion, which was higher than the anticipated $1.96 billion. This strong performance led the company to raise its full-year EPS guidance to $9.7 at the midpoint. In addition, Rockwell Automation saw a 45% year-over-year growth in its e-commerce and warehouse automation sectors. The company also experienced a 6% year-over-year decline in reported sales but managed to improve its segment operating margin to 20.4% from 19% the previous year. Analysts from various firms have taken note of these developments, with some suggesting positive future prospects for Rockwell Automation. The company is also focusing on strategic investments to enhance resilience and operational efficiency, aiming to mitigate potential risks such as supply chain disruptions and tariff impacts.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.