Rockwell Automation, Inc.

This is our first report on Rockwell Automation, a major provider of digital transformation and industrial automation solutions across the globe. Rockwell Automation produced an all-around beat in its last result as organic sales and earnings both exceeded market expectations and increased year over year. During the quarter, backlog orders increased sequentially. Order cancellation rates were unchanged from the previous quarter and remained in the low single digits through January 2023. The sustained strength of end-user demand across all industry segments and geographical areas gave hope. In a very dynamic supply chain environment, organic sales were 10% higher than they had been the previous year. Acquisitions this quarter generated roughly 1 point of growth, while currency translation decreased sales by 4%. Organic software and control revenues increased by about 16% over the previous year. Sales increased in the low teens in specialized businesses. Automotive sales inside discrete increased by 25% from the previous year. Furthermore, their latest software acquisitions continue to land them fresh logos across numerous sectors and geographical areas. They include Plex victories in the food, beverage, and automotive industries, as well as several enterprise asset management victories with Fiix’s cloud-native product. In addition, they announced a strategic investment in READY Robotics. We initiate coverage on the stock of Rockwell Automation with a ‘Hold’ rating.