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On Monday, Truist Securities adjusted its outlook for RBC Bearings (NYSE: NYSE:RBC), increasing the price target from $375.00 to $405.00 while reaffirming a Buy rating on the stock. Currently trading at $368.17 and near its 52-week high of $372.95, RBC has demonstrated strong momentum with a 23% year-to-date return. The firm’s analyst, Michael Clarmoli, cited the potential for continued expansion in gross margins as a key factor for the revised price target and introduced fiscal year 2027 estimates.
RBC Bearings reported fourth-quarter fiscal year 2025 results that matched revenue expectations and exceeded adjusted earnings per share forecasts, despite falling short on free cash flow. The company, with a market capitalization of $11.54 billion, maintained a healthy gross profit margin of 44.37% and achieved revenue growth of 4.87%. Management provided a first-quarter fiscal year 2026 revenue outlook that aligned with analyst expectations. While comprehensive annual guidance for fiscal year 2026 was not given, management anticipates at least 15% year-over-year growth in commercial aerospace and mid-single-digit growth in defense. Specific projections for the company’s industrial businesses were not disclosed.
In response to the company’s performance and management’s outlook, Truist Securities has modestly raised its industrial revenue projections for RBC Bearings for fiscal year 2026. The firm’s decision reflects RBC’s track record of market outperformance, balanced with a degree of caution due to the current macroeconomic environment.
The anticipated gross margin expansion for RBC Bearings in fiscal year 2026 is estimated to be between 50 to 110 basis points, primarily driven by the aerospace and defense (A&D) segment. This forecasted improvement in profitability underpins the confidence reflected in the new price target set by Truist Securities.
In other recent news, RBC Bearings announced its Q4 2025 financial results, reporting earnings per share (EPS) of $2.83, surpassing the forecast of $2.71. Despite this positive outcome, the company’s revenue fell slightly short of expectations, coming in at $437.7 million compared to the projected $439.46 million. RBC Bearings demonstrated a solid year-over-year sales increase of 5.8%, with notable growth in its aerospace and defense segments, which rose by 10.6% and 11.6%, respectively. The company also achieved a significant reduction in debt, amounting to $275 million, thereby enhancing its financial stability. Looking forward, RBC Bearings provided guidance for Q1 2026, projecting revenue between $424 million and $434 million, alongside an anticipated gross margin expansion. The company remains focused on growth in its aerospace and defense sectors, supported by production rate improvements at major clients like Boeing (NYSE:BA). RBC Bearings’ management expressed optimism about the future, citing investments in growth and a healthy expansion rate.
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