Rockwell Automation (ROK.N): Risk Reward Update

Morgan Stanley updated its estimates and marked valuation to market ahead of earnings for Rockwell Automation (ROK.N, United States). The stock rating remains Overweight with an Attractive industry view. The price target was lowered to $520.00 from $545.00; Bull Case lowered to $645.00 from $665.00, Base Case to $520.00 from $545.00, and Bear Case to $310.00 from $315.00. Our $520 price target is based on ~32.0x blended FY'27/28 EPS of $16.36, representing a ~70% premium to the S&P and ~40% premium to peers. We view ROK as attractively positioned: it holds a leading position in US advanced manufacturing and is poised to benefit from US Reshoring momentum, which we quantify as a multi-decade $10T opportunity that improves the company's long-term organic framework. Structural cost-out initiatives should support continued margin expansion. We forecast 9.0% organic growth and 21.7% operating margin in FY'26, and 7.2% organic growth and 22.8% margin in FY'27. Risks include US mega-project d