Credit Suisse Believes Regal Beloit (NYSE: RBC) Won’t Stop Here

By Ryan Adsit

Credit Suisse analyst Julian Mitchell reiterated a Buy rating on Regal Beloit (NYSE: RBC) yesterday and set a price target of $88. The company’s shares opened today at $80.05, close to its 52-week high of $83.65.

Mitchell commented:

“We hosted investor meetings with CEO Mark Gliebe, and Vice President Rob Rehard, in Boston earlier this week. The company seems to be making good progress in its efforts to drive Simplification, and the end-demand backdrop remains broadly favorable. Management should be in a position to start to deploy the balance sheet towards M&A again in 2018, but the broader focus of the company is shifting towards organic sales growth (and the headwind from HVAC OEM dual-sourcing has largely run its course), as opposed to its ‘serial acquirer’ status of the past. If the organic growth initiatives can bear fruit, the combination of this with margin expansion from Simplification, should be sufficient to push EPS over $6 (up from a range of $4-5 over 2010-2017E), and increase RBC’s valuation from its still heavily discounted level.”

According to, Mitchell is a 5-star analyst with an average return of 11.4% and a 70.1% success rate. Mitchell covers the Industrial Goods sector, focusing on stocks such as Gardner Denver Holdings Inc, Emerson Electric Company, and United Technologies Corp.

Regal Beloit has an analyst consensus of Moderate Buy, with a price target consensus of $84.80.

Regal Beloit’s market cap is currently $3.58B and has a P/E ratio of 17.32. The company has a book value ratio of 1.6795.

Based on the recent corporate insider activity of 47 insiders, corporate insider sentiment is neutral on the stock. Last month, Henry Knueppel, a Director at RBC sold 10,800 shares for a total of $864,216.

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Regal Beloit Corp. engages in the manufacture of electric motors, electrical motion controls, power generation, and power transmission products. It operates through the following segments: Commercial and Industrial Systems, Climate Solutions, and Power Transmission Solutions.