Truist Securities raised its price target on RBC Bearings (NYSE: RBC) to $599.00 from $542.00 on Friday while maintaining a Buy rating, pointing to widening gross margins and healthy volumes in aerospace and defense as the basis for its more optimistic outlook.
The research note aligns with other recent analyst moves: InvestingPro data cited in the same report indicates three analysts have recently upgraded their earnings expectations for the upcoming period, signaling a broader recalibration among coverage teams.
RBC Bearings delivered fiscal third-quarter 2026 results that exceeded revenue and adjusted earnings-per-share estimates, and management disclosed a backlog of $2.1 billion - an all-time high that already eclipses the company's $2.0 billion target for fiscal 2026.
Truist emphasized robust demand in defense end markets, with particular strength flagged in maritime and missiles, alongside rising aerospace original equipment manufacturer production rates. The combination of these factors is described by the firm as creating a solid near-term pipeline for the industrial bearings manufacturer.
On margins, Truist forecasts that aerospace gross margins should benefit from a mix of pricing, higher volumes, and favorable product mix over upcoming periods. The firm projects aerospace gross margins could approach 43% in fiscal 2027, reflecting anticipated margin leverage as volumes and pricing trends align.
The broader results profile for RBC includes earlier-quarter achievements: the company reported third-quarter 2025 adjusted EPS of $3.04, above the $2.85 consensus, and revenue of $461.6 million versus a $460.07 million forecast. Despite the upside to results, the stock moved lower in pre-market trading amid wider market pressures at that time.
Other broker activity echoed Truist's positive stance. KeyBanc raised its price target to $595 from $535 and retained an Overweight rating after a conference call where RBC provided constructive commentary on its Aerospace & Defense segment. The company also issued guidance for calendar 2026 calling for industrial growth in the high-single-digit percentage range.
Together, these analyst adjustments, the company’s reported outperformance, and a record backlog form the basis for the more bullish price targets. Investors and sector observers will be watching aerospace production rates, defense order flows, and execution that supports margin expansion to assess whether these expectations are met.
Key points
- Truist raised its RBC Bearings price target to $599 from $542 and kept a Buy rating, citing margin expansion and aerospace/defense volume strength.
- RBC reported fiscal Q3 2026 results above expectations and a record backlog of $2.1 billion, surpassing the company's $2.0 billion fiscal 2026 target.
- KeyBanc also lifted its target to $595 and the firm guided calendar 2026 industrial growth to the high-single-digit percentage range; analysts have revised earnings forecasts higher per InvestingPro.
Risks and uncertainties
- Execution risk: Realization of projected aerospace gross margins near 43% in fiscal 2027 depends on sustaining pricing, volumes, and mix improvements.
- Market sensitivity: The stock has shown vulnerability to broader market conditions despite upside to quarterly results, which could pressure shares independently of company fundamentals.
- Demand variability: Near-term performance is tied to aerospace OEM production rates and defense sector volumes - fluctuations in these areas would affect revenue and backlog conversion.