Goldman Sachs raised its target price on Rockwell Automation (NYSE:ROK) to $458.00 while keeping a Neutral rating on the industrial automation company. The broker's revision follows quarterly results and guidance that Goldman Sachs characterized as conservative, despite a set of metrics that outperformed expectations.
Rockwell's shares have risen 53.8% over the trailing year and the stock currently trades at a price-to-earnings ratio of 48.9, reflecting a premium valuation relative to historical averages. Goldman Sachs' updated outlook comes after the company reported quarterly results that exceeded consensus on several fronts.
Quarterly results and segment performance
Goldman Sachs noted that Rockwell's first-quarter fiscal 2025 results produced segment EBIT that beat both the bank's and FactSet consensus by 7%. The beat was driven primarily by stronger-than-expected performance in the Software & Control and Lifecycle Services segments, while results in the Intelligent Devices segment were weaker and partially offset the gains.
Separately, Rockwell reported better-than-expected results for the first quarter of fiscal year 2026, delivering earnings per share of $2.75 versus street estimates of $2.46, and revenue of $2.11 billion compared with an expected $2.08 billion. Despite these top- and bottom-line beats, the company's shares fell on the news.
Guidance and analyst response
Rockwell updated its fiscal 2026 EPS guidance to a range of $11.40 to $12.20, up from the prior range of $11.20 to $12.20. Management said this change was driven by a lower tax expectation of approximately 19.5%, down from an earlier assumption of 20.0%.
Goldman Sachs described the guidance as conservative. The bank highlighted that the guidance incorporates just 2 points of pricing increases, yet first-quarter 2026 pricing was up 3%, and additional list price increases were expected in April. Goldman also expects management to leverage SG&A to produce margin expansion of more than 100 basis points.
Goldman Sachs left its EPS model intact, maintaining estimates of $12.20 for fiscal 2026, $13.80 for fiscal 2027, and $15.50 for fiscal 2028. The firm noted that under these estimates Rockwell could reach the high end of its fiscal 2026 EPS guidance without requiring volume growth.
InvestingPro data referenced by analysts shows that eight analysts have recently raised their earnings estimates for the upcoming period, which could support the improved outlook embedded in the new guidance.
Market and analyst reactions
Despite the favorable earnings and revenue beats and the affirmation of fiscal 2026 sales and margin outlook, Rockwell's shares declined following the release. Oppenheimer subsequently reiterated its Perform rating on the stock. The mixed market response suggests investor focus remains on the interplay of segment-level trends, pricing, and margin delivery.
Overall, the company's recent results and guidance point to solid financial health, according to the reported figures, while market reactions highlight continuing investor scrutiny.