Pitch:
– Synergy targets from the recent merger are conservative and this merger will prove to be an incredible transaction.
– Cheap at 11.5x EPS of recently increased FY22 guidance with unlevered balance sheet – that’s prior to the full realization of guided merger synergies.
– Strong position with mission-critical products that represent only a small cost portion for customers.
Valuation:
– Expected FY23 revenues of $5.5bn (up +5% from ’22 levels), EBITDA of $1.2bn and EPS of $11.5/share.
– Trades at 10x FY23 EPS/FCF and 7.5x FY23 EBITDA.
Exp. gain: +50%
Full $RRX write-up (free guest account required):
https://www.valueinvestorsclub.com/idea/REGAL_REXNORD_CORPORATION/9155409578