Improving Credit Position Offers Further Upside in Regal Rexnord (RRX) Stock

Regal Rexnord Corporation (NYSE:RRX) is one of the 10 Data Center Cooling Companies to Invest In. On December 2, Julian Mitchell, an analyst at Barclays, reaffirmed his Buy rating on the stock. He assigned a price target of $165 to the company. The new target price offers 10.85% upside from the current price levels.

On November 21, Regal Rexnord Corporation signed an agreement replacing its previous credit facility. The firm announced on November 25 that it has entered into a Third Amended and Restated Credit Agreement as an administrative agent. This agreement was signed with a banking group led by JPMorgan Chase Bank, N.A. Under the agreement, RRX obtained an unsecured delayed-draw term loan of $850 million, with a maturity date of February 21, 2029. Additionally, the company also secured an unsecured revolving credit line in U.S. dollars and other currencies, of up to $1.5 billion, maturing on November 21, 2030.

Regal Rexnord Corporation’s (NYSE:RRX) strong current ratio of 2.05 supports this financing facility, as it demonstrates the company can readily meet its short-term obligations with liquid assets. The company intends to use these new credit facilities to pay associated expenses and fees, refinance its existing credit agreement, fund general corporate purposes, and finance capital expenditures and working capital.

Regal Rexnord Corporation (NYSE:RRX) provides sustainable solutions. The company offers motor, power transmission, and air handling solutions. It operates in three segments: Power Efficiency Solutions, Industrial Powertrain Solutions, and Automation and Motion Control.

READ NEXT:  Cathie Wood’s Stock Portfolio: Top 10 Stocks to Buy and 30 Most Fantastic Stocks Every Investor Should Pay Attention To.

Disclosure: None. This article is originally published at Insider Monkey.