Key Takeaways
- Rockwell Automation shares fell 13% today after fiscal fourth-quarter sales of $2.33 billion missed the $2.41 billion consensus.
- An $85 million accrual for tariff refunds to customers is bigger than the whole miss: before it, sales were $2.42 billion.
- Fiscal 2027 adjusted EPS guidance of $14.50 to $15.50 only brackets the $14.92 consensus, on a stock that traded at 30x forward earnings going in.
- Emerson Electric reported a 14% jump in underlying orders a day earlier, a sign automation demand is healthy.
Rockwell Automation (ROK) stock fell 13% today after its fiscal fourth-quarter sales missed Wall Street’s estimates. But the miss is money Rockwell chose to hand back to its customers.
Rival Emerson Electric (EMR) is down 5%, a day after its own results showed automation demand holding up.
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The refund is bigger than the miss
Sales for the quarter to Sept. 30 rose 1% to $2.33 billion, short of the $2.41 billion analysts expected.
But Rockwell got $103 million of tariffs back from the U.S. government this quarter, after the Supreme Court struck down the IEEPA tariffs. It’s refunding customers who paid its tariff price increases, and took an estimated $85 million out of sales for it.
Add that back, and sales come to $2.42 billion, just above the consensus. Organic growth would have been about 7%, instead of the 3% reported.
Emerson’s underlying orders rose 14% in its quarter to Sept. 30. It got tariff money back too, $82 million in its June quarter, and its results yesterday mention no refund for customers. With Rockwell’s customers getting checks, will Emerson’s ask for the same?
An in-line guide at 30x
Rockwell’s fiscal 2027 adjusted EPS guidance of $14.50 to $15.50 barely moves past what analysts already expected:
The $15.00 midpoint tops the $14.92 consensus by 8 cents. And its 6%-9% organic growth guide gets about 1 point from this year’s refund.
Rockwell, though, traded at 30x forward earnings going into the report, well above its five-year average of 27x:
At today’s price, it’s about 27x, right around that average.
The premium is gone
With the multiple back to its usual level, I think the stock looks a lot more reasonable than it did yesterday.
The risk is slower growth: without the refund’s lift, the fiscal 2027 guide is 5%-8% organic growth.
Of course, Rockwell’s next report, early next year, will show what customers actually claim against the estimated $85 million, and whether growth is tracking toward that range.
So what is Rockwell Automation stock actually worth?
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