Regal Rexnord (RRX): Evaluating Valuation as Order Growth Signals Business Acceleration in Data Centers and Automation

At the recent Baird Global Industrial Conference, Regal Rexnord (RRX) spotlighted a surge in order growth. Leadership highlighted rapid momentum in data centers, medical technology, and automation as key expansion drivers.

See our latest analysis for Regal Rexnord.

After months of steady declines and investor caution, Regal Rexnord’s recent order growth announcements appear to have sparked a shift in sentiment. The share price jumped 6.67% in a single day to $137.34, even though the 1-year total shareholder return stands at -21.78%. While the short-term rally highlights renewed optimism, longer-term performance indicates the company is still working to regain its former momentum.

If Regal Rexnord’s momentum shift has you exploring new opportunities, now could be a great time to discover fast growing stocks with high insider ownership.

With shares rebounding on upbeat order projections but still well below analyst price targets, the question remains: is Regal Rexnord undervalued at today’s levels, or has the market already factored in its expected growth?

Most Popular Narrative: 22.7% Undervalued

With Regal Rexnord shares most recently closing at $137.34 and the most widely followed narrative putting fair value at $177.73, the gap calls attention to the company's outlook and how key trends could drive re-rating potential. This sets the stage for a deeper dive into the main drivers behind this estimate.

Surging investment in smart manufacturing, industrial automation, and data center buildouts is leading to a significant backlog in power management and motion control projects, as evidenced by recent large data center wins and a robust order funnel. This future conversion of backlog to sales, especially in longer-cycle projects, should meaningfully support top-line expansion and margin enhancement into 2026.

Read the complete narrative.

Want to know what sets this price target apart? This mainstream valuation relies on ambitious growth rates in both earnings and profit margins, plus a bold assumption about Regal Rexnord’s future multiple. Ready to uncover the surprising foundations that drive this premium?

Result: Fair Value of $177.73 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, prolonged supply chain issues or weaker-than-expected demand in core markets could quickly dampen Regal Rexnord’s recovery story.

Find out about the key risks to this Regal Rexnord narrative.

Build Your Own Regal Rexnord Narrative

If the consensus storyline doesn't fully convince you, consider diving into the numbers yourself and shaping your perspective. It's quick, easy, and you can Do it your way.

A great starting point for your Regal Rexnord research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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