Value
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.5 |
| P/S | 6.2 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 3.5 |
| PEG | 4.4 |
| Analyst target | 3.0 |
- ▸Forward P/E: 32.3x
- ▸PEG: 2.05
ROK · Why this verdict
Why Rockwell Automation (ROK) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock has reached the resistance target of $464 with essentially zero implied upside from the current price of $463.57, meaning any near-term negative surprise in earnings, orders, or macro conditions would result in a meaningful drawdown with limited fundamental support at current levels. Warnings | Analyst consensus price targets are revised upward above $520 within 12 months following continued earnings beats and acceleration in AI-driven factory automation spending. | →Stable |
| CounterIndustrial automation companies with consistent beat streaks frequently see analyst targets revised upward after each quarterly report; the current target may be a floor rather than a ceiling. | ||
Revenue and earnings growth scores of 5.5 and 9.9 out of 10 respectively indicate Rockwell is delivering above-average growth relative to industrial peers, supported by strength in intelligent devices, software, and lifecycle services segments. Scores | Earnings per share grows by more than 15% year-over-year over the next four quarters as software and services mix shift drives margin expansion above the industrial hardware baseline. | →Stable |
| CounterIndustrial automation growth is closely tied to capital expenditure cycles; any manufacturing slowdown or inventory digestion period could rapidly reduce software attach rates and service call volumes. | ||
Rockwell has beaten earnings estimates in each of the last four consecutive quarters with an average positive surprise of 11.1%, driven by accelerating automation spending across discrete and process manufacturing industries that is outpacing consensus modeling. Earnings | The beat streak extends to six or more consecutive quarters as manufacturers accelerate factory automation investments in response to labor cost inflation and reshoring trends. | →Stable |
| CounterA perfect four-quarter beat streak in a cyclical industrial company at peak-cycle conditions is often followed by earnings deceleration as capacity investments absorb capital and order books normalize. | ||
Rockwell's 27% return on equity and Piotroski F-Score of 7 out of 9 reflect a capital-efficient industrial business with strong moat characteristics, ranking near the top of its specialty industrial machinery peer group on quality metrics. Quality breakdown | Return on equity remains above 22% over the next four quarters as software and services revenue grows as a proportion of total revenue, improving the overall capital efficiency of the business. | →Stable |
| CounterA forward price-to-earnings multiple of 31.9 times and a PEG ratio of 2.02 mean investors are already paying a full premium for Rockwell's quality advantage, leaving limited room for further multiple expansion. | ||
The stock has reached the resistance target of $464 with essentially zero implied upside from the current price of $463.57, meaning any near-term negative surprise in earnings, orders, or macro conditions would result in a meaningful drawdown with limited fundamental support at current levels.
→StableWarnings
- Expectation
- Analyst consensus price targets are revised upward above $520 within 12 months following continued earnings beats and acceleration in AI-driven factory automation spending.
CounterIndustrial automation companies with consistent beat streaks frequently see analyst targets revised upward after each quarterly report; the current target may be a floor rather than a ceiling.
Revenue and earnings growth scores of 5.5 and 9.9 out of 10 respectively indicate Rockwell is delivering above-average growth relative to industrial peers, supported by strength in intelligent devices, software, and lifecycle services segments.
→StableScores
- Expectation
- Earnings per share grows by more than 15% year-over-year over the next four quarters as software and services mix shift drives margin expansion above the industrial hardware baseline.
CounterIndustrial automation growth is closely tied to capital expenditure cycles; any manufacturing slowdown or inventory digestion period could rapidly reduce software attach rates and service call volumes.
Rockwell has beaten earnings estimates in each of the last four consecutive quarters with an average positive surprise of 11.1%, driven by accelerating automation spending across discrete and process manufacturing industries that is outpacing consensus modeling.
→StableEarnings
- Expectation
- The beat streak extends to six or more consecutive quarters as manufacturers accelerate factory automation investments in response to labor cost inflation and reshoring trends.
CounterA perfect four-quarter beat streak in a cyclical industrial company at peak-cycle conditions is often followed by earnings deceleration as capacity investments absorb capital and order books normalize.
Rockwell's 27% return on equity and Piotroski F-Score of 7 out of 9 reflect a capital-efficient industrial business with strong moat characteristics, ranking near the top of its specialty industrial machinery peer group on quality metrics.
→StableQuality breakdown
- Expectation
- Return on equity remains above 22% over the next four quarters as software and services revenue grows as a proportion of total revenue, improving the overall capital efficiency of the business.
CounterA forward price-to-earnings multiple of 31.9 times and a PEG ratio of 2.02 mean investors are already paying a full premium for Rockwell's quality advantage, leaving limited room for further multiple expansion.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Rockwell Automation is a high-quality industrial automation company with a perfect four-quarter earnings beat streak, 27% return on equity, and meaningful earnings growth, but the stock trades above analyst price targets with nearly zero near-term upside, making it a hold rather than a compelling new entry at current prices.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 9.1 |
| ROA | 6.2 |
| Gross margin | 5.8 |
| Op margin | 8.3 |
| Net margin | 6.2 |
| Current ratio | 4.3 |
| FCF quality | 6.5 |
| Moat | 6.8 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 27%
- ▸Strong Piotroski F-Score: 7/9
Growth
7.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.5 |
| EPS growth | 9.9 |
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 5.4 |
| MA position | 9.0 |
| Volume | 2.9 |
- ▸Above 200-day MA
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 4.9 |
| erm sentiment | 5.2 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $5,232,475 (0.010% of mkt cap)
Peer rank
3.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.9 |
| quality rank | 7.5 |
| growth rank | 6.1 |
- ▸Superior ROE vs peers
Technical
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.0 |
| support resistance | 4.5 |
| 52w position | 9.0 |
Risk (lower is worse)
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.2 |
| days to cover | 5.3 |
| volatility | 4.9 |
| put call | 7.7 |
| implied vol | 5.1 |
| beta | 4.9 |
| debt equity | 4.7 |
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 8.1 |
| dividend safety | 4.8 |
- ▸Perfect beat streak: 4Q
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.6>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:33d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.6=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.56
Upside
-10.6%
Downside
6.8%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 56, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.54>1.3
Investment implication
The F-path SELL output reflects an overall score of 5.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 7.7) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.6=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.56 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 7.7, Quality at 6.8, and Momentum at 6.6; the weakest are Value at 3.3, Peer rank at 3.9, and Insider at 5.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -1.56 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak Automation
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters, ending the sustained beat pattern.
- P2High Quality Roe Piotroski
Trip ifReturn on equity falls below 20% for 2 consecutive quarters, indicating the quality advantage is eroding under pricing or volume pressure.
- P3Price At Analyst Target No Upside
Trip ifPrice rises above $510 while analyst targets remain below $480, creating a premium of more than 6% above fair value consensus.
- P4Strong Revenue And Earnings Growth
Trip ifRevenue growth falls below 5% year-over-year in any reported quarter, signaling that automation spending cycles are decelerating materially from current levels.