As one of the top-two discrete automation vendors in North America (alongside Siemens (OTCPK:SIEGY)), Rockwell (ROK) remains well-placed to take advantage of ongoing automation adoption in factories, as well as newer trends like industrial IoT, hybrid automation, and the automation of logistics and warehouse facilities. It remains to be seen if reshoring will hold the same appeal with a new administration taking over in Washington, but brighter prospects for an effective COVID-19 vaccine should at least reduce some of the risks to the 2021/2022 economic outlook.
I thought Rockwell’s valuation was high in my last update, and the shares have since underperformed by about 10% (relative to multi-industrial peers), though the long-term (three-year or five-year) track record is still quite favorable. While I don’t object to a “best of breed” premium for Rockwell, and markets like autos, food/beverage, and life sciences should be strong in 2021, the prospective return still isn’t all that compelling to me.
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Rockwell Automation Knocked Back A Bit On Less Robust Outperformance
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