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Roper Technologies, Inc. (ROP - Free Report) , on Aug 19, priced an offering of $2 billion for its senior unsecured notes in aggregate. The offering comprises $500 million of 4.500% senior notes due to expire on Oct 15, 2029, and $500 million of 4.750% senior notes due to expire on Feb 15, 2032. It also includes $1 billion of 4.900% senior notes set to expire on Oct 15, 2034. Subject to customary closing conditions, this offering is anticipated to close on Aug 21, 2024.
As communicated by the company, notes due to expire in 2029 have been priced at 99.550% of the principal amount while notes that are set to expire in 2032 have been offered to the public at 99.814% of the principal amount.
The notes, which are due to expire in 2034, have been priced at 99.515% of the principal amount. Interest rates on the notes set to expire in 2029 and 2034 will be paid semi-annually on Apr 15 and Oct 15, starting from Apr 15, 2025. Interest rates on the notes, which are due to expire in 2032, will be paid semi-annually on Feb 15 and Aug 15, beginning Feb 15, 2025.
Ratings of the issuance are expected to be 'Baa2' by Moody's Investors Service and 'BBB+' by Standard & Poor's Ratings Services.
Roper intends to use the funds to repay part of the borrowings outstanding under its five-year unsecured credit facility and its outstanding 2.350% senior notes, which are due in 2024. Moreover, the proceeds will be utilized to meet general corporate purposes including future buyouts.
We believe that the offering of senior notes will increase ROP’s debts and, in turn, may inflate its financial obligations and hurt profitability. However, prepaying part of certain indebtedness will offer some relief. Exiting second-quarter 2024, long-term debt (net of current portion) remained high at $6.92 billion.
Zacks Rank, Price Performance and Earnings Trend
With a market capitalization of $58.7 billion, Roper presently carries a Zacks Rank #3 (Hold). The company is benefiting from strength across its Deltek, Vertafore, PowerPlan and Aderant businesses. However, high debt levels might have an adverse impact on its profitability.
Image Source: Zacks Investment Research
ROP’s shares have gained 12.6% in the past year compared with the industry’s 19.1% growth.
The Zacks Consensus Estimate for 2024 earnings has decreased 0.1% to $18.16 per share in the past 60 days.
3 Promising Stocks
Some better-ranked stocks from the same space are discussed below.
CRNC delivered a trailing four-quarter average earnings surprise of 83.6%. In the past 60 days, the Zacks Consensus Estimate for Cerence’s fiscal 2024 earnings has increased 15%.
ServiceNow, Inc. (NOW - Free Report) presently sports a Zacks Rank of 1. The company delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the consensus estimate for NOW’s 2024 earnings has increased 2.2%.
Unisys Corporation (UIS - Free Report) currently sports a Zacks Rank of 1. UIS delivered a trailing four-quarter average earnings surprise of 87.7%.
In the past 60 days, the Zacks Consensus Estimate for Unisys’ 2024 earnings has increased more than 100%.
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Roper Technologies (ROP) Prices Senior Unsecured Notes Offering
Roper Technologies, Inc. (ROP - Free Report) , on Aug 19, priced an offering of $2 billion for its senior unsecured notes in aggregate. The offering comprises $500 million of 4.500% senior notes due to expire on Oct 15, 2029, and $500 million of 4.750% senior notes due to expire on Feb 15, 2032. It also includes $1 billion of 4.900% senior notes set to expire on Oct 15, 2034. Subject to customary closing conditions, this offering is anticipated to close on Aug 21, 2024.
As communicated by the company, notes due to expire in 2029 have been priced at 99.550% of the principal amount while notes that are set to expire in 2032 have been offered to the public at 99.814% of the principal amount.
The notes, which are due to expire in 2034, have been priced at 99.515% of the principal amount. Interest rates on the notes set to expire in 2029 and 2034 will be paid semi-annually on Apr 15 and Oct 15, starting from Apr 15, 2025. Interest rates on the notes, which are due to expire in 2032, will be paid semi-annually on Feb 15 and Aug 15, beginning Feb 15, 2025.
Ratings of the issuance are expected to be 'Baa2' by Moody's Investors Service and 'BBB+' by Standard & Poor's Ratings Services.
Roper intends to use the funds to repay part of the borrowings outstanding under its five-year unsecured credit facility and its outstanding 2.350% senior notes, which are due in 2024. Moreover, the proceeds will be utilized to meet general corporate purposes including future buyouts.
We believe that the offering of senior notes will increase ROP’s debts and, in turn, may inflate its financial obligations and hurt profitability. However, prepaying part of certain indebtedness will offer some relief. Exiting second-quarter 2024, long-term debt (net of current portion) remained high at $6.92 billion.
Zacks Rank, Price Performance and Earnings Trend
With a market capitalization of $58.7 billion, Roper presently carries a Zacks Rank #3 (Hold). The company is benefiting from strength across its Deltek, Vertafore, PowerPlan and Aderant businesses. However, high debt levels might have an adverse impact on its profitability.
Image Source: Zacks Investment Research
ROP’s shares have gained 12.6% in the past year compared with the industry’s 19.1% growth.
The Zacks Consensus Estimate for 2024 earnings has decreased 0.1% to $18.16 per share in the past 60 days.
3 Promising Stocks
Some better-ranked stocks from the same space are discussed below.
Cerence Inc. (CRNC - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CRNC delivered a trailing four-quarter average earnings surprise of 83.6%. In the past 60 days, the Zacks Consensus Estimate for Cerence’s fiscal 2024 earnings has increased 15%.
ServiceNow, Inc. (NOW - Free Report) presently sports a Zacks Rank of 1. The company delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the consensus estimate for NOW’s 2024 earnings has increased 2.2%.
Unisys Corporation (UIS - Free Report) currently sports a Zacks Rank of 1. UIS delivered a trailing four-quarter average earnings surprise of 87.7%.
In the past 60 days, the Zacks Consensus Estimate for Unisys’ 2024 earnings has increased more than 100%.