Rockwell Automation (ROK) PT Raised to $400 at TD Cowen

TD Cowen analyst Joseph Giordano raised the price target on Rockwell Automation (NYSE: ROK) to $400.00 (from $350.00) while maintaining a Hold rating.

The analyst commented: "Growth will decelerate in 2H, but exit rate now looks more palatable and MSD/HSD organic in 2027 is reasonable absent a negative shift in the economy. Margin comps will get much more challenging into next year, but it's good progress. Entry is the biggest issue with shares at 20- year high valuation and still meaningful economic uncertainty. We see upside to current Street and believe management is leaning conservative in public commitments (even if there was some, at least perceived, confusion on messaging in the preQ conference season). Valuation remains challenging - shares currently sit at 20-year highs in absolute terms and also relative to both the S&P and QQQ. Currently, ROK at nearly 32x FY27 earnings compares with the S&P at ~20x (with similar margins) and a 9 turn premium to QQQ despite margins ~500bps below. ROK does have momentum and markets coming out of a challenging period. To be more positive, however, we'd either have to see a reset in the price or have more confidence in assuming a powerful cyclical recovery - challenging in an environment of geopolitical uncertainty, rising inflation / rates, and high energy prices. We move our PT to $400 to reflect our upward estimate revisions, which assumes ~30x current year earnings and ~27x next year.

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