Regal Rexnord Reports Strong Q4 Earnings Driven by Data Center Demand
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4d ago
0mins
Should l Buy RRX?
Source: seekingalpha
- Earnings Beat: Regal Rexnord (RRX) reported adjusted earnings of $2.51 per share for Q4, surpassing analysts' expectations of $2.48, indicating strong profitability driven by data center demand.
- Revenue Growth: The company achieved a 4.3% year-over-year revenue increase to $1.52 billion in Q4, although it narrowly missed Wall Street's consensus estimate of $1.54 billion, reflecting ongoing market demand fluctuations.
- Order Surge: Daily orders surged 53.8% year-over-year, primarily due to robust demand for the data center E-Pod solution, securing approximately $735 million in E-Pod orders during the quarter, with initial shipments expected in early 2027, showcasing the company's competitive edge in a key growth market.
- Optimistic Outlook: Regal Rexnord forecasts earnings of $5.29 to $6.09 per share for 2026, with adjusted earnings projected between $10.20 and $11.00, representing roughly 10% growth at the midpoint, reflecting the company's confidence in future growth and cash flow.
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Analyst Views on RRX
Wall Street analysts forecast RRX stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for RRX is 179.57 USD with a low forecast of 160.00 USD and a high forecast of 212.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
7 Analyst Rating
6 Buy
1 Hold
0 Sell
Strong Buy
Current: 200.000
Low
160.00
Averages
179.57
High
212.00
Current: 200.000
Low
160.00
Averages
179.57
High
212.00
About RRX
Regal Rexnord Corporation provides sustainable solutions that power, transmit and control motion. Its electric motors and air moving subsystems provide the power to create motion. Its segments include Industrial Powertrain Solutions (IPS), Power Efficiency Solutions (PES) and Automation & Motion Control (AMC). IPS segment designs, produces and services a broad portfolio of highly-engineered transmission products, including mounted and unmounted bearings, couplings, mechanical power transmission drives and components, gearboxes and gear motors, clutches, brakes, and industrial powertrain components and solutions. PES segment designs and produces fractional to approximately five horsepower AC and DC motors, electronic variable speed controls, electronic drives, fans and blowers, as well as integrated subsystems comprised of two or more of these components. AMC segment designs, produces and services conveyor products, conveying automation subsystems, aerospace components and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Earnings Beat: Regal Rexnord (RRX) reported adjusted earnings of $2.51 per share for Q4, surpassing analysts' expectations of $2.48, indicating strong profitability driven by data center demand.
- Revenue Growth: The company achieved a 4.3% year-over-year revenue increase to $1.52 billion in Q4, although it narrowly missed Wall Street's consensus estimate of $1.54 billion, reflecting ongoing market demand fluctuations.
- Order Surge: Daily orders surged 53.8% year-over-year, primarily due to robust demand for the data center E-Pod solution, securing approximately $735 million in E-Pod orders during the quarter, with initial shipments expected in early 2027, showcasing the company's competitive edge in a key growth market.
- Optimistic Outlook: Regal Rexnord forecasts earnings of $5.29 to $6.09 per share for 2026, with adjusted earnings projected between $10.20 and $11.00, representing roughly 10% growth at the midpoint, reflecting the company's confidence in future growth and cash flow.
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- Strong Order Growth: Regal Rexnord reported a 53.8% increase in daily orders for Q4 2025, resulting in a 50% year-over-year increase in backlog, which provides robust momentum as the company enters 2026, highlighting its competitive strength in the market.
- Data Center Business Breakthrough: The company secured approximately $735 million in e-Pod solution orders for its Data Center business, illustrating a significant growth trajectory from a $30 million business five years ago to a defined path toward $1 billion in sales, showcasing its market potential.
- Outstanding Financial Performance: Adjusted earnings per share for Q4 were $2.51, up 7.3% year-over-year, with an adjusted gross margin of 37.6%, reflecting a 50 basis point increase, indicating broad-based growth and enhanced profitability across various business segments.
- Optimistic Future Outlook: The company guided for approximately 3% sales growth in 2026, with 1 to 1.5 points from the large data center project, and adjusted earnings per share guidance of $10.20 to $11, demonstrating management's confidence in future performance and market opportunities.
See More
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- Earnings Beat: Regal Rexnord (RRX) reported adjusted earnings of $2.51 per share for Q4, surpassing analysts' expectations of $2.48, indicating strong profitability driven by data center demand.
- Revenue Growth: The company achieved a 4.3% year-over-year revenue increase to $1.52 billion in Q4, although it narrowly missed Wall Street's consensus estimate of $1.54 billion, reflecting ongoing market demand fluctuations.
- Order Surge: Daily orders surged 53.8% year-over-year, primarily due to robust demand for the data center E-Pod solution, securing approximately $735 million in E-Pod orders during the quarter, with initial shipments expected in early 2027, showcasing the company's competitive edge in a key growth market.
- Optimistic Outlook: Regal Rexnord forecasts earnings of $5.29 to $6.09 per share for 2026, with adjusted earnings projected between $10.20 and $11.00, representing roughly 10% growth at the midpoint, reflecting the company's confidence in future growth and cash flow.
See More
