Tuesday, Truist Securities updated its outlook on RBC (TSX:RY) Bearings (NYSE:RBC), increasing the price target to $328 from $309 while maintaining a Buy rating on the stock.
The adjustment follows the company's fourth-quarter results, which showed a slight year-over-year decline in the Industrial sector.
This was attributed to high comparison figures from the previous year when the company was working through a significant backlog.
The firm noted that management anticipates moderate growth in the Industrial sector for the fiscal year 2025. The Aerospace sector remains robust, with first-quarter revenue guidance for fiscal year 2025 being 2.7% higher than analyst expectations and low double-digit growth projected for the year.
Despite potential disruptions from the MAX program, the company is expected to see minimal impact due to the strength of other programs.
According to Truist Securities, RBC Bearings is poised to experience margin improvements driven by growth in the aerospace sector, cost control initiatives, and strong defense demand.
The company's earnings per share (EPS) and free cash flow (FCF) are both expected to benefit from a reduction in preferred dividend payments in the second half of fiscal year 2025.
The firm's stance is based on the company's recent performance and future expectations, indicating confidence in RBC Bearings' ability to continue its growth trajectory and deliver value to its shareholders.
InvestingPro Insights
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