#7 - RBC Bearings (NYSE:RBC)
RBC Bearings (NASDAQ:ROLL) is the last of the defense stocks on our list. ROLL stock is up 8% in the last month, but is still trading near the bottom of its 52-week range. According to the Global Industry Analysts Inc. (GIA), the global bearings market is expected to reach $162.1 billion by 2026. And considering that this study was conducted prior to the Russian invasion, that number is likely to be low.
The company’s products will be in demand for the company’s and sectors that will benefit from the recently passed infrastructure bill. And the company’s products are also used in the renewable energy sector for wind turbines. The anticipated growth should help the company’s valuation look more attractive.
The company reported a beat on the top and bottom lines when it reported earnings in February. And analysts currently believe ROLL stock has a 22% upside with a price target of $233.60.
About RBC Bearings
RBC Bearings Incorporated manufactures and markets engineered precision bearings, components, and systems in the United States and internationally. It operates through two segments, Aerospace/Defense and Industrial. The company produces plain bearings with self-lubricating or metal-to-metal designs, including rod end bearings, spherical plain bearings, and journal bearings; roller bearings, such as tapered roller bearings, needle roller bearings, and needle bearing track rollers and cam followers, which are anti-friction products that are used in industrial applications and military aircraft platforms; and ball bearings include high precision aerospace, airframe control, thin section, and industrial ball bearings that utilize high precision ball elements to reduce friction in high-speed applications.
Read More - Current Price
- $336.82
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 4 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $324.67 (3.6% Downside)
An emerging story stemming from the Russian invasion of Ukraine is the steps that many countries are taking to bolster their defense capabilities. And the definition of defensive capabilities will also leak over into the area of cybersecurity which is another sector for investors to keep an eye on.
This means that the rally in defense stocks is not just a U.S.-centric event. And that means that the stocks listed in this presentation and several others are likely to have a long runway.
If investing in individual defense stocks does not fit your investing style, you can consider investing in an exchange-traded fund that is focused on the aerospace and defense sector. There are currently five prominent ETFs that trade on the U.S. markets with total assets under management (AUM) of $5.7 billion. The largest of these funds is the iShares U.S. Aerospace & Defense ETF (BATS:ITA) with approximately $3 billion in assets.
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