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On June 17, 2026, we delve into the DCF analysis for Rockwell Automation Inc ROK , a company that has shown impressive price performance over the past year, with a 1-week increase of 1.3%, a 1-month rise of 4.2%, a year-to-date gain of 20.6%, and a remarkable 1-year surge of 45.8%. Here are some key points from our analysis:

DCF Earnings-based intrinsic value of $152.33 vs current price of $466.31 (margin of safety: -206.1%) DCF FCF-based intrinsic value of $136.93 vs current price (margin of safety: -240.6%) GF Score™ of 79/100 indicating a reliable assessment of the DCF inputs What Is ROK Worth? DCF Earnings-Based Model To determine the intrinsic value of Rockwell Automation, we employed a two-stage DCF model. The first stage considers the growth phase over the next ten years, where we expect the earnings per share (EPS) to grow at a rate of 6.2% annually. The second stage accounts for a terminal growth rate of 4% for the subsequent ten years. The discount rate applied to these cash flows is 11%, derived from the risk-free rate and equity risk premium.

Parameter Value Current EPS (TTM, excl. non-recurring) $12.21 10-Year Growth Rate 6.2% 10-Year Treasury Rate 4.43% Discount Rate (ceil(Treasury) + 6%) 11% Terminal Growth Rate 4% In the first stage, the growth stage value is calculated based on the projected EPS growth. The second stage reflects the terminal value based on a reduced growth rate. Below is a summary of the calculations:

Stage Description Value Growth Stage (Years 1-10) EPS growing at 6.2%, discounted at 11% $96.52 Terminal Stage (Years 11-20) 4% terminal growth, discounted at 11% $55.81 Intrinsic Value Growth + Terminal $152.33 With the current price at $466.31, the intrinsic value of $152.33 indicates that Rockwell Automation is significantly overvalued, with a margin of safety of -206.1%. It is important to note that GuruFocus utilizes EPS excluding non-recurring items as research indicates that stock prices are more closely correlated with earnings than with free cash flow. For further analysis, you can visit the ROK DCF Calculator.

What Does the Free Cash Flow DCF Say? In addition to the earnings-based model, we also evaluated Rockwell Automation using a free cash flow (FCF) DCF model. The FCF-based intrinsic value is calculated at $136.93. This value further supports the earnings-based assessment, as both models indicate that the stock is significantly overvalued, with a margin of safety of -240.6%.

How Does GF Value™ Compare to the DCF Models? The GF Value™ for Rockwell Automation is calculated at $312.61, providing a third perspective on the company's valuation. The GF Value™ is a proprietary measure from GuruFocus, derived from historical trading multiples, past business growth, and future performance estimates. All three models—DCF earnings, DCF FCF, and GF Value™—consistently indicate that Rockwell Automation is overvalued. For more details, visit the GF Value™ page.

What Does ROK's GF Score™ Tell Us? The GF Score™ ranks stocks on a scale from 0 to 100 based on five key aspects: Financial Strength, Profitability, Growth, Valuation, and Momentum. Stocks with higher GF Score™ values have historically generated higher long-term returns (backtested from 2006 to 2021).

Metric Rating GF Score™ 79/100 Financial Strength 6/10 Profitability 8/10 Growth 6/10 Valuation 3/10 Momentum 10/10 With a predictability rank of 0/5 stars, the reliability of the DCF model for Rockwell Automation is low. For more information, visit the ROK stock page.

Key Assumptions and Limitations It is crucial to note that DCF models are highly sensitive to the assumptions made regarding growth rates and discount rates. Companies with low predictability ratings, such as Rockwell Automation, produce less reliable DCF estimates. The terminal growth rate of 4% is a simplifying assumption that may not reflect future economic conditions accurately.

What This Means for Investors In summary, the three valuation models—DCF earnings, DCF FCF, and GF Value™—all indicate that Rockwell Automation is significantly overvalued. Investors should exercise caution when considering this stock based on the current valuations presented.

For the full DCF analysis, visit the ROK DCF Calculator. You can also explore the GF Value™ page, or use the GuruFocus Stock Screener to find undervalued predictable companies.

Frequently Asked Questions What is ROK's intrinsic value based on DCF?

[Answer: earnings-based $152.33, FCF-based $136.93]

Is ROK overvalued or undervalued?

[Answer using DCF + GF Value™ consensus]

How reliable is the DCF model for ROK?

[Answer using predictability rank 0/5]

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].