Oppenheimer’s Favorite Stocks For Next 12 Months: Top 32 Stock Picks

14. Regal Rexnord Corporation (NYSE:RRX)

Share Price Upside: 17%

Number of Hedge Fund Investors In Q2 2024: 32

Average Analyst Share Price Target: $195.63

Regal Rexnord Corporation (NYSE:RRX) is a diversified industrial equipment manufacturer that makes and sells products such as gears, motors, switches, bearings, and other associated items. This provides it exposure to a broad set of industries, including mining, agriculture, food and beverage, and cooling. This means that Regal Rexnord Corporation (NYSE:RRX) thrives when the economy is growing as the firm has the chance to capture tailwinds from a wider set of industries. However, it also means that the firm struggles when the economy is slow, a fact that is also apparent in its stock price which is up a modest 8.31% over the past twelve months. Amidst this downturn, Regal Rexnord Corporation (NYSE:RRX) has focused on reducing its debt and preparing itself for the eventual recovery in industrial spending by launching new products such as a new maintenance platform for industrial manufacturing. As per Oppenheimer, Regal Rexnord Corporation (NYSE:RRX)’s “long-term profit improvement initiatives…look increasingly enabling for broadened share gain momentum and strategic mix management initiatives.”

Diamond Hill Capital mentioned Regal Rexnord Corporation (NYSE:RRX) in its Q2 2024 investor letter. Here is what the firm said:

“Regal Rexnord (RRX) were pressured against a backdrop of macroeconomic concerns which are seemingly making investors hesitant to own leveraged cyclical companies like RRX. However, we maintain our conviction in the outlook for RRX and believe that over the long term, it will capitalize on merger synergies to improve margins, increase organic growth and generate meaningful free cash flow, which should allow it to deleverage.”