Regal Rexnord (RRX): Exploring the Valuation Story Behind Recent Share Price Volatility

Regal Rexnord (RRX) shares have experienced moderate fluctuations over the past month, reflecting the broader industrials sector as investors weigh recent trends in revenue and net income growth. The company’s results have drawn renewed attention to its long-term performance.

See our latest analysis for Regal Rexnord.

Regal Rexnord’s share price has drifted lower since the start of the year, now trading at $145.07, and the one-year total shareholder return is down 12.01%. While momentum has faded recently, the stock’s three- and five-year total returns of 33% and 48% indicate there is still a longer-term growth story behind the recent volatility.

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With shares currently trading well below analyst targets and solid underlying growth, the question facing investors is whether Regal Rexnord is now undervalued or if the market has already priced in any upside potential.

Most Popular Narrative: 19.6% Undervalued

Regal Rexnord’s most widely followed narrative sees significant upside, with the estimated fair value well above the latest closing price of $145.07. This sets the stage for a bold outlook driven by the company’s expansion into rapidly growing electric and automation markets.

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

Read the complete narrative.

Curious what financial forecasts justify this optimistic outlook? This narrative hinges on aggressive margin expansion, earnings momentum, and ambitious revenue assumptions. Want to see which number unlocks Regal Rexnord’s hidden value? The details might surprise you.

Result: Fair Value of $180.40 (UNDERVALUED)

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

However, potential supply chain shocks or prolonged weakness in core markets could challenge Regal Rexnord’s upside if these issues are not managed effectively.

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

Another View: Gauging Value by Price Ratios

Looking beyond future growth models, Regal Rexnord’s price-to-earnings ratio sits at 37.5x, above the US Electrical industry’s average of 29.4x and matching its peer group. However, our analysis shows the fair ratio could be as high as 53x, suggesting the stock is not stretched by historical standards. Does this gap reveal untapped value, or is the premium a potential warning?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Regal Rexnord Narrative

If you see Regal Rexnord’s story differently or want to dig into the numbers yourself, you can quickly build your own perspective from scratch by using 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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