Regal Rexnord Corporation
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Regal Rexnord is a buy as the operational turnaround becomes visible: quarterly revenue growth has turned positive at +4.2% YoY in Q2 2026 (revenue of $1.56B) after two consecutive years of annual declines, operating margin expanded to 11.6% in FY2025 from 9.6% in FY2023, and total debt has been cut from $6.55B to $5.06B over two years while free cash flow reached $893.1M at a 15.1% margin.
At 11.95x EV/EBITDA — 34.3% below the peer median of 18.18x — and 1.69x price-to-sales vs a 3.47x peer median, the stock is deeply discounted relative to comparable industrial machinery names despite improving fundamentals and robust order momentum (daily orders up 8.8%) with data center exposure that could drive a materially stronger 2027. The stock's technical weakness (RSI of 41.45, price of $154.01 well below the 200-day MA of $189.56) reflects near-term uncertainty around the effectively cut 2026 guidance and Q2 results partly flattered by tariff refunds, but the deleveraging trajectory, consistent earnings beats, and cheap entry point create favorable risk-reward ahead of Q3 2026 earnings on November 3rd.
What could go wrong
- Guidance cut and tariff-distorted results. Q2 2026 headline growth was flattered by tariff refunds, underlying earnings and margins were weaker, and 2026 guidance was effectively cut — if the core business ex-tariffs is decelerating, the fundamental recovery narrative breaks.
- Persistent insider selling. Over the past 24 months, insiders have net sold 161,386 shares for a net value of -$30.7M with zero open-market acquisitions; the most recent October 14, 2026 transactions are small RSU-vesting grants, not conviction buys.
- Elevated leverage. Total debt of $5.06B as of FY2025 remains substantial despite the deleveraging from $6.55B in FY2023; any deterioration in FCF ($893.1M FY2025) could slow debt reduction and constrain capital allocation.
- Technical downtrend. The stock at $154.01 trades well below both its 50-day MA ($161.10) and 200-day MA ($189.56), indicating persistent bearish momentum that could continue if Q3 2026 earnings disappoint.
What would change my mind
Where this comes from: Q2 FY26 results · FY23 and FY25 fundamentals · FY25 fundamentals · peer comparison. Orin's read on RRX; not advice.
How has the share price moved?
Up 8.0% over twelve months, from $146.50 on 27 Oct 2025 to $158.21 at the Tue 27 Oct 2026 close. Its highest close in that time was $238.19 on 30 Jun 2026; the last close is 33.6% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 4.8M, on 5 Feb 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All RRX filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $1.5B | 0.0% |
| FMR | $1.1B | 0.0% |
| Vanguard Capital Management | $716.9M | 0.0% |
| Vanguard Portfolio Management | $675.1M | 0.0% |
| Wellington Management Group | $615.5M | 0.1% |
| Viking Global Investors | $500.6M | 1.4% |
| State Street | $498.9M | 0.0% |
| Bank of New York Mellon | $449.3M | 0.1% |
| Invesco | $352.1M | 0.0% |
| Geode Capital Management | $301.1M | 0.0% |
80 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 307 Form 4 filings; open-market trades net −$29.1M. Of the 50 on hand, 0 were open-market purchases and 3 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about RRX
Orin answers questions about RRX from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 32.4× its last 12 months of profit (Tue 27 Oct close) — higher than in 1 of the 4 of its last 5 fiscal years with a P/E (middle 34.2×); the typical Industrials company on the NYSE is at 33.7×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 32.4×below usual | 34.2× | 33.7× |
| P/S | 1.74×above usual | 1.57× | — |
| EV/EBITDA | 12.2×below usual | 13.3× | — |
| P/B | 1.5×above usual | 1.4× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $242 (from $200 to $286) — 53% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$242
$200 – $286 · +53% against the last close
- 6 buy or overweight
- 1 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 32.4× its last 12 months of profit; the middle P/E of the 8 companies it is compared to that made a profit is 30.5×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| RRXRegal Rexnord Corporation | $11B | 32.4× | 12.2× | 37.8% | 5.3% | 5% |
| ALNTAllient Inc. | $1B | 33.8× | 16.5× | 33.2% | 6.2% | 12% |
| DOVDover Corporation | $28B | 23.9× | 15.2× | 39.7% | 13.6% | 15% |
| GTESGates Industrial Corporation plc | $7B | 18.1× | 11.2× | 40.5% | 10.4% | 11% |
| IEXIDEX Corporation | $17B | 32.3× | 19.3× | 44.9% | 14.6% | 13% |
| IRIngersoll Rand Inc. | $29B | 30.8× | 16.5× | 37.9% | 12.1% | 9% |
| NPOEnPro Industries, Inc. | $6B | 136× | 32.4× | 42.8% | 3.6% | 3% |
| PHParker-Hannifin Corporation | $113B | 30.2× | 21.2× | 37.7% | 16.6% | 25% |
| TKRThe Timken Company | $7B | 24.5× | 12.7× | 29.1% | 5.9% | 9% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 32.4× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now32.4×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Industrials companies on the NYSE were priced at a typical 33.7× their yearly profit (Tue 27 Oct close).
- Now33.7×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $237 a share — 50% above the $157.75 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $237 | 50% above $157.75 |
| Levered | $245 | 55% above $157.75 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.