Regal Rexnord (RRX), mcap=$9.2bn, price $137 vs $114

– 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.

– 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):

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