Regal Beloit Corporation (RRX) Shares: Are They Risky Or Cheap?

Regal Beloit Corporation (NYSE:RRX) finished Friday with a subtraction of -$0.52 to close at $150.25, a downside of -0.34 percent. An average of 716,600 shares of common stock have been traded in the last five days. There was a gain of $6.00 in the past week, and it reached a new high 22 times over the past 12 months. The last 20 days have seen an average of 1,258,595 shares traded, while the 50-day average volume stands at 647,680.

RRX stock has increased by 10.94% in the last month. The company shares reached their 1-month lowest point of $130.34 on 10/11/21. With the stock rallying to its 52-week high on 03/18/21, shares of the company touched a low of $87.80 and a high of $152.25 in 52 weeks. It has reached a new high 10 times so far this year and achieved 28.28% or $27.44 in price. In spite of this, the price is down -1.31% from the 52-week high.

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Valuation Metrics

Regal Beloit Corporation (RRX) has a trailing price-to-earnings (P/E) ratio of 23.62, which compares with the 20.30 for the broader industry and 29.83 for the sector. In the last five years, Regal Beloit Corporation’s PE ratio has ranged between 33.17 and 9.454. The stock’s beta is 1.28. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 3.16, the price-to-book (PB) ratio at 2.29, and the price-to-cash flow ratio at 36.25.

The company has a payout ratio of 18.70%.

The quick ratio of Regal Beloit Corporation for the recent quarter was 1.40, and the current ratio was 2.20, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.30 and a total debt to equity ratio of 0.38 for the recent quarter. Regal Beloit Corporation’s EBITDA margin is 17.09%, while its operating margin for the same period stands at 11.40%. Its gross profit as reported stood at $808.7 million compared to revenue of $2.91 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Regal Beloit Corporation’s return on assets was 5.60%. For the broader industry, ROE averaged 7.02 over the past year.

Earnings Surprise

Shareholders own equity worth $40.7 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Regal Beloit Corporation (RRX) price momentum. RSI 9-day as of the close on 22 October was 63.61%, suggesting the stock is Neutral, with historical volatility in this time frame at 16.99%.

As of today, RRX’s price is $148.55 +4.16% or $6.00 from its 5-day moving average. RRX is currently trading +4.97% higher than its 20-day SMA and +5.91% higher than its 100-day SMA. However, the stock’s current price level is -2.30% below the SMA50 and +9.97% above the SMA200.

The stochastic %K and %D were 89.61% and 80.25%, respectively, and the average true range (ATR) was 4.30. With the 14-day stochastic at 96.42% and the average true range at 4.38, the RSI (14) stands at 58.42%. The stock has reached 5.26 on the 9-day MACD Oscillator while the 14-day reading was at 8.32.

Analyst Ratings

The consensus rating for Regal Beloit Corporation (RRX) among analysts is Buy. According to current brokerage recommendations, 0 brokerage firms advise that investors sell RRX, while 0 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 1 analysts, while 6 others rate it as a “buy”.

What is RRX’s price target for the next 12 months?

Analysts predict a range of price targets between $175.00 and $202.00, with a median target of $185.00. Taking a look at these predictions, the average price target given by analysts for Regal Beloit Corporation (RRX) stock is $186.71.


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