Rockwell Automation (ROK) faces a shift in the US factory automation cycle, marked by firming margins and increased orders, and fiscal Q1 orders of $2 billion alleviate concerns over meeting fiscal 2025 and 2026 revenue targets, Morgan Stanley said Tuesday in a report.
Rockwell benefits from increased US manufacturing investment driven by post-election tariff outcomes and long-term manufacturing construction growth and the order run rate of $8 billion is only a mild increase compared to previous cycles, the report said.
The company stands to benefit from the US reshoring trend, which is fueling long-term manufacturing capital expenditures growth after 25 years of stagnation, the report said.
Rockwell's ability to retain market share ensures that rising US manufacturing construction activity translates into stronger order volumes, the report said.
Morgan Stanley raised its price target on Rockwell stock to $345 from $335 with an overweight rating.
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