In This Article:
Let's talk about the popular Rockwell Automation, Inc. (NYSE:ROK). The company's shares received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$304 at one point, and dropping to the lows of US$255. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Rockwell Automation's current trading price of US$259 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Rockwell Automation’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What's The Opportunity In Rockwell Automation?
According to our valuation model, Rockwell Automation seems to be fairly priced at around 3.22% above our intrinsic value, which means if you buy Rockwell Automation today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $250.71, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Rockwell Automation’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
See our latest analysis for Rockwell Automation
What does the future of Rockwell Automation look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Rockwell Automation's earnings over the next few years are expected to increase by 48%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? ROK’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?