Jefferies Raises Price Target on Regal Beloit (RBC), Experiencing Accelerated Growth

Jefferies is maintaining their Buy rating on shares of Regal Beloit (NYSE: RBC) following a meeting with management. The firm came away from the meeting feeling confident that sales were continuing to be strong while raw materials are maybe facing some large inflation spikes. They are raising their price target on the company to $80 from $75.

The firm reports that they have checked with a HVAC distributors, including the market's largest, which all point that sales are growing so far in 2011. RBC is anticipating on launching 50 new products in 2011 as trends remain strong. Regal Beloit's CFO believes that the company can achieve a operating margin of 14-16%, the firm agrees.

Jefferies feels that 2011 should be a really strong year for the company with the acquisition of AOS's motors business (EPC) being a more positive attribute to the company than they can imagine. With improving end-markets and higher inflationary prices on raw materials being able to be passed to the customer, RBC should experience accelerated growth after 1Q11. This growth will be the key driver for the share price.

They are raising their 2011 EPS estimate by $0.10 to $4.40 and their 2012 by $0.15 to $5.10, EPC deal is included in these estimates.

For more ratings news on Regal Beloit click here and for the rating history of Regal Beloit click here.

Shares of Regal Beloit closed at $72.77 yesterday.

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