Will Regal Rexnord's (RRX) Data Center Ambitions Reshape Its Long-Term Growth Story?

• Regal Rexnord presented at the Baird 55th Annual Global Industrial Conference on November 12, 2025, in Chicago, highlighting its operations and future outlook to industry leaders and investors.
• The company revealed significant order growth driven by increased exposure to fast-growing sectors like data centers, medical technology, and automation, with expectations for its data center business to double over the next two years.
• We’ll explore how these developments, especially the doubling forecast for the data center business, affect Regal Rexnord’s investment narrative.

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Regal Rexnord Investment Narrative Recap

To own Regal Rexnord as a shareholder, you need to see potential in its pivot toward higher-growth markets such as data centers and automation, while accepting that the company's recent track record has been mixed. The latest news, highlighting expectations to double the data center business, reinforces management’s focus on growth catalysts, but does not materially change the immediate risk: softness and destocking in core markets continue to limit organic growth and earnings momentum in the near term.

Among recent developments, the company's revised 2025 earnings guidance, lowered after its Q3 report, stands out. This shift serves as a reminder that while new order growth from areas like data centers is encouraging, it has yet to fully offset persistent weakness across mature sectors. Investors are left weighing fresh growth opportunities against ongoing execution and demand headwinds.

Yet, with this new focus, investors should watch for unresolved risks in ...

Read the full narrative on Regal Rexnord (it's free!)

Regal Rexnord's outlook suggests revenues will reach $6.5 billion and earnings $695.5 million by 2028. This is based on an assumed annual revenue growth rate of 3.5% and represents an increase in earnings of about $445 million from current earnings of $250.4 million.

Uncover how Regal Rexnord's forecasts yield a $177.73 fair value, a 38% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members estimated Regal Rexnord’s fair value between US$166.86 and US$177.73, drawing on two unique perspectives. These varying views sit alongside the ongoing challenge of sustaining organic growth, which continues to shape expectations for future profit improvement.

Explore 2 other fair value estimates on Regal Rexnord - why the stock might be worth as much as 38% more than the current price!

Build Your Own Regal Rexnord Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Regal Rexnord research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Regal Rexnord's overall financial health at a glance.

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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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