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Here's Why Hold Strategy is Apt for RBC Bearings (RBC) Stock
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RBC Bearings Incorporated (RBC - Free Report) is poised to gain from strength in the Aerospace/Defense segment and accretive acquisitions despite softness in the Industrial Segment and the rising cost of sales.
What’s Aiding RBC?
Business Strength: RBC Bearings is benefiting from the strong performance of the Aerospace/Defense segment. Strength in commercial aerospace, driven by the recovery in build rates from large OEMs (original equipment manufacturer), and stability in the aftermarket are driving the segment. Rising U.S. & international defense budgets and robust demand for commercial air travel will augur well for the segment in the quarters ahead. For the first quarter of fiscal 2025 (ending June 2024), RBC Bearings anticipates net sales in the range of $415-$420 million, indicating a year-over-year increase of 7.2-8.5%.
Expansion Efforts: RBC has expanded its reach with the acquisition of Carson City, NV-based precision bearings manufacturer Specline, Inc. in August 2023. Specline’s unique bearing and manufacturing processes expanded RBC Bearings’ aerospace product offerings and boosted the production capacity.
Rewards to Shareholders: RBC Bearings remains committed to rewarding its shareholders handsomely through share buyback programs. In fiscal 2024 (ended March 2024), the company paid dividends of $22.9 million, almost flat year over year, and repurchased shares for $11 million, which increased 41.4% year over year.
In light of the above-mentioned positives, we believe investors should retain RBC stock for now, as suggested by its Zacks Rank #3 (Hold). In the past year, shares of the company have gained 32.8% compared with the industry’s 17.5% growth.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below.
The consensus estimate for BDC’s 2024 earnings has increased 8.3% in the past 60 days. Shares of Belden have gained 0.3% in the past year.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter average earnings surprise of 8.2%.
The consensus estimate for AIT’s fiscal 2024 earnings has improved 1.4% in the past 60 days. The stock has gained 37.8% in the past year.
Crane Company (CR - Free Report) presently carries a Zacks Rank of 2. CR delivered a trailing four-quarter earnings surprise of 15.2%, on average.
The Zacks Consensus Estimate for CR’s 2024 earnings has increased 4% in the past 60 days. Its shares have gained 79.2% in the past year.
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Here's Why Hold Strategy is Apt for RBC Bearings (RBC) Stock
RBC Bearings Incorporated (RBC - Free Report) is poised to gain from strength in the Aerospace/Defense segment and accretive acquisitions despite softness in the Industrial Segment and the rising cost of sales.
What’s Aiding RBC?
Business Strength: RBC Bearings is benefiting from the strong performance of the Aerospace/Defense segment. Strength in commercial aerospace, driven by the recovery in build rates from large OEMs (original equipment manufacturer), and stability in the aftermarket are driving the segment. Rising U.S. & international defense budgets and robust demand for commercial air travel will augur well for the segment in the quarters ahead. For the first quarter of fiscal 2025 (ending June 2024), RBC Bearings anticipates net sales in the range of $415-$420 million, indicating a year-over-year increase of 7.2-8.5%.
Expansion Efforts: RBC has expanded its reach with the acquisition of Carson City, NV-based precision bearings manufacturer Specline, Inc. in August 2023. Specline’s unique bearing and manufacturing processes expanded RBC Bearings’ aerospace product offerings and boosted the production capacity.
Rewards to Shareholders: RBC Bearings remains committed to rewarding its shareholders handsomely through share buyback programs. In fiscal 2024 (ended March 2024), the company paid dividends of $22.9 million, almost flat year over year, and repurchased shares for $11 million, which increased 41.4% year over year.
In light of the above-mentioned positives, we believe investors should retain RBC stock for now, as suggested by its Zacks Rank #3 (Hold). In the past year, shares of the company have gained 32.8% compared with the industry’s 17.5% growth.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below.
Belden Inc. (BDC - Free Report) presently sports a Zacks Rank #1 (Strong Buy) and has a trailing four-quarter earnings surprise of 14.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for BDC’s 2024 earnings has increased 8.3% in the past 60 days. Shares of Belden have gained 0.3% in the past year.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter average earnings surprise of 8.2%.
The consensus estimate for AIT’s fiscal 2024 earnings has improved 1.4% in the past 60 days. The stock has gained 37.8% in the past year.
Crane Company (CR - Free Report) presently carries a Zacks Rank of 2. CR delivered a trailing four-quarter earnings surprise of 15.2%, on average.
The Zacks Consensus Estimate for CR’s 2024 earnings has increased 4% in the past 60 days. Its shares have gained 79.2% in the past year.