What Happened?
Shares of industrials products and automation company Regal Rexnord (NYSE: RRX). jumped 13.7% in the afternoon session after the company reported strong first quarter 2025 results which significantly beat analysts' organic revenue expectations. In addition, its EPS and full-year EPS guidance topped Wall Street's estimates. What stood out was the 8% organic growth in its Power Efficiency unit, thanks to solid demand for home heating and cooling equipment in North America. Also, while sales dropped due to selling off a business, the company's core lines still grew nearly 1% organically. Zooming out, we think this quarter featured some important positives.
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What The Market Is Telling Us
Regal Rexnord’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. But moves this big are rare even for Regal Rexnord and indicate this news significantly impacted the market’s perception of the business.
Regal Rexnord is down 18% since the beginning of the year, and at $125.68 per share, it is trading 31% below its 52-week high of $182.22 from November 2024. Investors who bought $1,000 worth of Regal Rexnord’s shares 5 years ago would now be looking at an investment worth $1,764.
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