Will This Bank of America Upgrade Help RBC Bearings (ROLL) Today?

NEW YORK (TheStreet) -- Bank of America upgraded RBC Bearings  (ROLL) to "buy" from "neutral" and set a $75 target price. The firm noted aerospace and defense demand remains strong and the worst of the industrial business is likely already behind the company.

The stock was rising 3.78% to $63.96 when the market opened on Wednesday.

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Separately, TheStreet Ratings team rates RBC BEARINGS INC as a "buy" with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate RBC BEARINGS INC (ROLL) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 18.3%. Since the same quarter one year prior, revenues slightly increased by 4.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • RBC BEARINGS INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, RBC BEARINGS INC increased its bottom line by earning $2.48 versus $2.23 in the prior year. This year, the market expects an improvement in earnings ($2.74 versus $2.48).
  • The net income growth from the same quarter one year ago has exceeded that of the Machinery industry average, but is less than that of the S&P 500. The net income increased by 5.4% when compared to the same quarter one year prior, going from $12.11 million to $12.76 million.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • Net operating cash flow has decreased to $14.43 million or 26.15% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • You can view the full analysis from the report here: ROLL Ratings Report

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