Regal Rexnord Corporation (RRX): A Bull Case Theory

We came across a bullish thesis on Regal Rexnord Corporation on Valueinvestorsclub.com by Sturges95. In this article, we will summarize the bulls’ thesis on RRX. Regal Rexnord Corporation ‘s share was trading at $147.29 as of September 4^th. RRX’s trailing and forward P/E were 39.17 and 13.09, respectively according to Yahoo Finance.

Regal Rexnord Corporation (RRX) has transformed from a traditional electric motor and power transmission manufacturer into a global leader in sustainable motion and power solutions, with a market cap of $8.9 billion, revenues of $6 billion, and EBITDA margins around 22%. Over the past decade, strategic acquisitions—including Emerson Electric’s Power Transmission Solutions in 2015, Rexnord’s industrial power transmission business in 2021, and Altra Industrial Motion in 2023—have expanded its Automation & Motion Control (AMC) and Industrial Powertrain Solutions (IPS) segments, while divesting its lower-growth industrial motors and generators business, completing a shift toward higher-growth markets.

RRX now operates three segments: AMC, tied to discrete automation and aerospace/medical applications with 5% growth and 22% EBITDA margins; IPS, linked to industrial and heavy machinery with 4% growth and 26% EBITDA margins; and Power Efficiency Solutions (PES), focused on residential and commercial motors, growing below company average with 16% EBITDA margins. The company has improved operational efficiency under its CEO since 2019, achieving gross margin expansion of 1,100 basis points and EBITDA margin improvement of 700 basis points. Looking ahead, RRX’s 2027 targets call for $6.4–7.0 billion in revenue, 40% gross margins, and 25% EBITDA margins, all above current street expectations, highlighting potential upside.

Positive backlog trends in AMC and IPS, coupled with delivered synergies, support confidence in achieving these targets. RRX’s shares trade at reasonable multiples relative to history, with an EBITDA multiple of 10.2x and P/E of 13x, suggesting upside potential if execution aligns with targets. Key catalysts include upcoming quarterly earnings, which could validate growth, margin expansion, and free cash flow improvements, further strengthening investor confidence and multiple expansion, making RRX an attractive risk/reward opportunity.

Previously we covered a bullish thesis on AMETEK, Inc. (AME) by An Investing Life in March 2025, which highlighted the company’s leadership in niche electronic instruments, pricing power, recurring aftermarket revenue, and disciplined acquisitions. The stock has appreciated approximately 6.65% since our coverage. The thesis still stands as its diversified portfolio supports growth. Sturges95 shares a similar perspective but emphasizes Regal Rexnord’s transformation, operational improvements, and backlog momentum.

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Disclosure: None.