GET DAILY SIGNALSRegal Rexnord (RRX) Delivers +6.1% Organic Growth in Q3 2026 with Raised EPS Guidance
Key Takeaways
- Regal Rexnord reported third-quarter 2026 revenue of $1.59 billion, up 6.1% on an organic basis and ahead of the consensus estimate of roughly $1.56 billion.
- Adjusted earnings per share (EPS) reached $2.90, exceeding analyst expectations of approximately $2.67 to $2.69; excluding tariff refunds, adjusted EPS was $2.72, up 8.4% year over year.
- GAAP results swung to a net loss of $12.5 million (a diluted loss of $0.19 per share), driven primarily by a $119.3 million goodwill impairment charge.
- Daily orders rose 5.7% in the quarter, and October orders accelerated to a 24% increase, supported by data center and discrete automation demand.
- Management raised full-year adjusted EPS guidance to a midpoint of $10.75 and highlighted a deleveraging milestone of 2.9x net debt to adjusted EBITDA.
Why This Quarter Stands Out
Regal Rexnord's third-quarter 2026 report provides a useful test of whether the industrial manufacturer can maintain accelerating organic growth amid tariff pressures and shifting demand patterns. The company has positioned itself toward secular growth areas like data center power management to balance softer conditions in traditional industrial markets. Investors have also focused on balance sheet progress after a period of acquisitions, and this quarter's mix of a large non-cash impairment alongside tariff refunds gives a clearer picture of core operating trends.
I also checked this using Tickeron's AI Screener to see how the stock compares to others in the industry.
The Reported Figures
Regal Rexnord reported third-quarter 2026 revenue of $1.59 billion, reflecting a 6.1% organic increase and coming in above the consensus estimate of about $1.56 billion. Adjusted EPS came in at $2.90, beating expectations of roughly $2.67 to $2.69. Excluding $14.7 million of net refunds related to tariffs under the International Emergency Economic Powers Act, adjusted EPS was $2.72, up 8.4% year over year and $0.15 above management's guidance midpoint.
On a GAAP basis, the company recorded a net loss of $12.5 million, or $0.19 per diluted share, primarily due to a $119.3 million goodwill impairment. Adjusted EBITDA reached $351.3 million for a 22.1% margin; excluding tariff refunds, it was $337 million. Free cash flow totaled $194 million.
Segment performance showed Automation & Motion Control revenue rising 24.5% to $500.6 million with organic sales up 25.2%, while Industrial Powertrain Solutions revenue declined 1.9% to $649.5 million and Power Efficiency Solutions revenue increased 1.2% to $437.9 million.
How the Market Responded
Shares of RRX moved higher after the release as investors emphasized the revenue and adjusted earnings beats along with the pickup in order activity rather than the non-cash impairment. The 8.7% adjusted EPS beat and October's 24% daily order growth supported views that demand is broadening beyond data centers into commercial HVAC and discrete automation. Sentiment stayed measured, however, with some analysts noting modest pressure on underlying gross margins excluding tariff refunds.
Key Items to Follow Going Forward
Attention now turns to whether order momentum translates into sustained organic revenue growth. Management highlighted a $113 million switchgear order booked in October and a data center pipeline centered on modular power solutions, though project timing in this area can vary. Continued strength in commercial HVAC and discrete automation would point to healthier demand across multiple end markets.
Margin execution will remain important. Excluding one-time tariff refunds, adjusted gross margin faced some price-cost pressure and operating headwinds, partly offset by volume gains. Progress on mitigating tariff effects and rare earth magnet constraints will influence profitability into 2026.
The balance sheet also merits watching. Achieving 2.9x net debt to adjusted EBITDA represents meaningful progress on deleveraging, and further debt reduction could support free cash flow and flexibility. The raised full-year adjusted EPS guidance with a $10.75 midpoint offers a near-term reference point, while commentary on data center and broader industrial conditions will likely influence the stock's direction.
Exploring AI Tools in My Research Process
From what I see, Tickeron's AI Daily Buy/Sell Signals has become a useful addition to my routine when reviewing earnings like these. It helps surface pattern-based signals across a wide universe of stocks without replacing fundamental work. I find it complements traditional analysis by highlighting potential turning points or confirmation points in real time, especially when order trends or margin dynamics are shifting.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
RRX's MACD Histogram crosses above signal line
The Moving Average Convergence Divergence (MACD) for RRX turned positive on October 28, 2026. Looking at past instances where RRX's MACD turned positive, the stock continued to rise in 36 of 50 cases over the following month. The odds of a continued upward trend are 72%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 28, 2026. You may want to consider a long position or call options on RRX as a result. In 64 of 94 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 68%.
RRX moved above its 50-day moving average on November 02, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +3.42% 3-day Advance, the price is estimated to grow further. Considering data from situations where RRX advanced for three days, in 225 of 327 cases, the price rose further within the following month. The odds of a continued upward trend are 69%.
RRX may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Stochastic Oscillator has been in the overbought zone for 2 days. Expect a price pull-back in the near future.
The 10-day moving average for RRX crossed bearishly below the 50-day moving average on October 20, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 14 of 16 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 88%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where RRX declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 73%.
The Aroon Indicator for RRX entered a downward trend on September 29, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is 60 (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 61 (best 1 - 100 worst), indicating steady price growth. RRX’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 63 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.550) is normal, around the industry mean (4.069). P/E Ratio (32.977) is within average values for comparable stocks, (37.908). Projected Growth (PEG Ratio) (1.166) is also within normal values, averaging (1.879). Dividend Yield (0.009) settles around the average of (0.031) among similar stocks. P/S Ratio (1.644) is also within normal values, averaging (186.943).
The Tickeron Profit vs. Risk Rating rating for this company is 79 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. RRX’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 74, placing this stock worse than average.
The Tickeron SMR rating for this company is 83 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
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General Information
a manufacturer of electrical and mechanical motion control products
Industry IndustrialMachinery
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