_edited.png)
RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Rockwell Automation, Inc. (XNYS:ROK) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ROK
Name:
ROCKWELL AUTOMATION, INC. (XNYS:ROK)
Sector:
- 49100.00K
Industry:
Specialty Industrial Machinery
CEO:
Mr. Blake Moret
Total Employees:
24,500
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -5.16% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ROCKWELL AUTOMATION, INC.(ROK) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SPECIALTY INDUSTRIAL MACHINERY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
238.01
One Month Price Target:
$239.97
Six Month Price Target :
$249.77
Likely Price in One Year's Time:
Ticker:
$261.53
Likely Trading Range Today Under (Normal Volatility)
$237.17
Price Upper limit ($) :
$239.09
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$226.56
This week:
$212.4
This month :
$186.79
Other Primary facts
Market Cap:
27.50B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
115.44M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.58%
-17.14%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$291.15
$266.72
$184.87
$209.30
Medium risk (<10%) entry points
Buy Call
Sell Call
$258.77
Buy Put:
Sell Put:
$253.55
$217.18
$222.47
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ROK
Sharpe Ratio:
1.79%
Comparison:
ROK, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -5.63% lower than the industry
& is -21.56% lower than the market/S&P 500 average
Average Returns/Yield of
ROK
Daily returns:
0.05%
Weekly returns:
0.26%
Monthly returns:
1.02%
Yearly returns:
16.25%
Comparison of returns:
Average annual returns/yield (last 3 years) is -24.39% below industry average
Classification:
ROK, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.61
Statistical test of Returns:
ROK has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.37%
Weekly Volatility:
5.30%
Monthly Volatility:
10.59%
Yearly Volatility:
36.69%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.51%
Volatility in last five trading days has been -36.04% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.81%
Weekly VaR:
-10.76%
Monthly VaR:
-21.52%
How Much Can the price of
ROK
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-74.55%
This translates to price declining to:
$194.11
This translates to price declining to:
$60.56
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
ROK is a 51.90% riskier investment compared to the market/S&P 500 & is 30.13% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -13.44% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ROK
Beta in relation to market/S&P 500--1.47
Expected beta in 1 year's time:
0.798
Expected beta in 3 year's time:
1.128
Unlevered (debt free) Beta:
0.592
Beta in relation to Nasdaq (XNAS):
0.815
Beta in relation to all global stocks::
0.82
Beta Comparison & Analysis
Beta of competitors/peers::
0.97
Beta is 51.60% higher than peers
Average Industry Beta:
1.281
Beta is 14.74% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
22.19%
Sustainable growth rate is 49.05% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.009
Alpha is -121.65% below industry average alpha yield
Alpha is -60% below the market average
Analysis of Cost of Capital of
ROK
Equity cost of capital:
0.132
Equity cost of capital is 10.84% above industry mean WACC
Unlevered (without debt) cost of capital:
5.32%
Before-tax cost of debt:
2.42%
After-tax cost of debt:
1.92%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.92%
WACC is -78.00% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$63.42
Revenue growth rate per share of (3Y):
9.79
Annual revenue growth rate is -53.12% below industry average
EPS:
$5.50
Expected Annual growth rate of EPS (3Y):
12.53%
Expected future EPS growth rate is 310.92% higher than the Specialty Industrial Machinery industry
Free cash flow (FCF) per share:
$5.13
Balance sheet equity growth per share: 17.73%
Equity growth rate per share is 64.26% higher than the industry
Debt per share
$32.71
EBITDA per share
$8.53
Valuation Analysis Today of
ROK
P/E Ratio:
41.53
P/E Ratio of Competitors/Peers:
25.86
P/E ratio is 60.60% higher than main peers & is 50.94% higher than the industry
Stock price/value with industry average P/E ratio: $151.33
ROK is 57.28% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $45.30
Present value of the expected future dividends only: $36.48
P/S (Price to Sales ratio):
3.75
Price to sales ratio is -9.56% below the industry mean
P/B (Price to book value ratio):
9.79
Price to free cash flow: 46.40
-
Net income growth rate (3Y):
164.76%
Net income growth rate is 12140.89% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 20.16%
Dividend yeild: 1.86%
Previous Dividend: $1.12
Previous adjusted dividend: $1.12
Previous Dividend: $4.43
Expected next dividend best case: $1.15
Expected next dividend worst case: $1.09
Average dividend payment (long-term): $1.07
Average dividend increase/decrease (growth rate) % per period: 0.96%
Expected next dividend payment date: 09/08/2022
Expected next dividend record date: 15/08/2022
Expected next dividend declaration date: 07/04/2022
Previous dividend payment date: 06/10/2022
Previous dividend record date: 16/05/2022
Previous dividend declaration date: 04/05/2022
Dividend History:
2022-05-13--$1.12
2021-11-12--$1.12
2021-05-14--$1.07
2022-02-11--$1.12
2021-08-13--$1.07
2021-02-12--$1.07
Dividend growth rate is -72.47% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
150.74%
Net debt to equity ratio:
156.95%
Debt to assets ratio:
35.15%
Net debt to assets ratio:
36.59%
Debt-to-asset ratio is -34.86% below industry average
Ability to repay debt:
Interest coverage ratio:
9.08
Interest coverage ratio is -53.47% less than industry average
Looking forward:
Debt growth rate:
118.97%
Annual debt growth is 59% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.726
Statistical significance of correlation:
ROK has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.635
Stock price is 14.21% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.635
Correlation of price movement with Nasdaq (^IXIC):
-0.009
Covariance of price movement with the market:
-0.013
Kurtosis
13.838
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.224
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
ROK
Gross Profit Margin Ratio:
158%
Operating Profit Margin Ratio:
15.53%
Operating profit margin is -164.12% lower than the industry
Net Profit Margin Ratio:
158%
Effective Tax Rate:
1.48%
Effective tax rate is -92.07% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
25.76%
Return on equity (ROE) is 666.58% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
6.01%
Return on assets (ROA) is 27.96% higher than the industry
Financial Leverage:
1.5x
Current Ratio:
1.07
Current ratio is -64.42% below industry average
Cash Conversion Cycle (days):
20.3
Cash conversion cycle is -67.08% below industry average
-
Stock based compensation to net income ratio:
2.40%
In-depth Efficiency Analysis
Revenue generated per employee:
298.8K
Each employee generates -92% less revenue than industry average revenue per employee
EBITDA generated per employee:
40.2K
Each employee generates -95% less EBITDA than industry average revenue per employee
Profit generated per employee:
26.3K
Each employee generates -93% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 2.0K
Each employee generates -104% less free cash flow than industry average revenue per employee
Assets/Capital per employee
310.7K
Each employee generates -104% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
ROK
FERGUSON PLC (XNYS:FERG)
TRANSDIGM GROUP INCORPORATED (XNYS:TDG)
OTIS WORLDWIDE CORPORATION (XNYS:OTIS)
WASTE CONNECTIONS, INC. (XNYS:WCN)
REPUBLIC SERVICES, INC. (XNYS:RSG)
CUMMINS INC. (XNYS:CMI)
L3HARRIS TECHNOLOGIES, INC. (XNYS:LHX)
AMETEK, INC. (XNYS:AME)
Enbridge Inc. (XNYS:ENBA)
Current Analyst Ratings
Strong buy�0%
Buy�13%
Hold�63%
Sell�13%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
7.32B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
4.42B
2.90B
-
-
1.76B
-
-
1.76B
1.00M
108.40M
221.30M
984.40M
1.14B
645.20M
641.40M
9.50M
645.20M
Statement of Cash Flow
Date:
Period:
58.90M
Differed Income Tax :
-
Stock Based Compensation :
15.50M
Change in Working Capital :
- 326800.00K
Accounts Receivables:
-
Other Working Capital:
- 141100.00K
Other Non-Cash Items:
- 1100.00K
Net Cash Provided by Operating Activities:
- 12000.00K
Investments in PP&E:
-
Net Acquisitions:
- 10500.00K
Purchases of Investments:
- 1500.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
12/31/21
2022
Q1
540.00M
-
540.00M
1.49B
868.90M
236.00M
3.13B
954.80M
3.62B
994.10M
1.37B
373.20M
296.80M
7.61B
-
10.74B
851.30M
695.60M
184.20M
487.30M
879.90M
2.91B
3.78B
1.25B
5.02B
-
7.94B
181.40M
8.11B
- 1012200.0K
-
December 31, 2021 at 12:00:00 AM
6.18B
2.50B
10.44B
-
4.47B
3.9B
-
- 36700.00K
- 48700.00K
-
-
- 49800.00K
- 130100.00K
127.90M
- 52000.00K
- 9500.00K
- 122200.00K
557.20M
679.40M
- 12000.00K
- 37100.00K
- 49100.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
ROK
2023
2024
2025
2026
2027
$267.73
$294.18
$323.25
$355.18
$390.28