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Morgan Stanley analysts told investors in a note Tuesday that the firm continues to see Rockwell Automation (NYSE:ROK) as well positioned over the next several years.
The analysts maintained an Overweight rating and a Street high $335 price target on the stock.
They explained that the view follows work on the major near-shoring and U.S. manufacturing announcements over the past two years. The firm also looked into ROK’s significant excess backlog and believes the company’s valuation is at “an unusual point in an unusual cycle.”
“For all the cyclical ambiguity reflected in macro caution and strong micro trends, the backdrop for automation spending and backlog cushion against a hard landing supports a bullish view on ROK,” wrote the analysts.
The analysts added that as sector earnings risk rises (which they believe it will despite solid group-level results in the fourth quarter), “ROK’s multiple is defensible with consensus earnings that still look too low in FY24 and FY25.”
“We continue to view ROK’s markets and shares as well placed in our coverage universe,” stated the analysts.
