UBS Raises Price Target on Rockwell Automation (ROK) to $136
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UBS reiterated a Buy rating on Rockwell Automation (NYSE: ROK), and raised the price target to $136.00 (from $125.00), following the company's 4Q earnings report. ROK reported EPS of $1.52, above $1.49 consensus estimate. Organic sales declined 4% (vs. our -5% estimate) with A&S up 1.4% and CP&S down 8%. 2017 adjusted EPS was guided to $5.85-$6.25 (vs. consensus of $5.98) on organic sales growth 0-4%.
Analyst Shannon O'Callaghan commented, "F4Q16 EPS of $1.52 was below our $1.54 estimate and above $1.49 consensus, but ROK executed $10M of unplanned restructuring ($20M vs $10M guide) without which we estimate 4Q EPS would have been $0.06 higher. ROK expects the $20M of restructuring to benefit F2017 by $30M and $40M+ in total; 2017 restructuring is now expected to be ~$15M lower. A&S margins of 25.8% (vs. our 27.5%) would have been 27.3% without the higher restructuring. CP&S missed us by $0.01. Lower tax (+$0.07) from more favorable geographic mix was partially offset by higher corporate (-$0.03)."
Shares of Rockwell Automation closed at $124.24 yesterday.
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