RRX Stock Forecast & Price Target

Regal Rexnord is attractive because its new CEO Aamir Paul brings relevant data center expertise that should improve execution, while the company’s accelerating AMC demand profile is being powered by robust orders in data centers, aerospace, medical, and discrete automation. The data center opportunity is especially compelling, with about $180 million of 2026 sales expected to grow to roughly $240 million in CY27, $735 million of ePOD orders already received, and about $840 million of total AMC data center sales implied for CY27. Fundamentally, deleveraging and improving free cash flow should lower interest expense by about $35 million in 2026 and another $40 million in CY27, supporting earnings growth as margin headwinds from tariffs and mix gradually fade.

Regal Rexnord is facing a fundamentally challenged outlook because management has already trimmed 2027E adj. EPS to $13.05 from $13.50, reflecting weaker assumptions in PES and IPS and signaling less confidence in near-term earnings momentum. Sustained customer share loss, commodity inflation, and higher investment costs tied to data center growth could limit revenue expansion, squeeze margins, and weigh on free cash generation, while working capital needs may slow deleveraging and interest expense savings. Although ePOD adds growth potential with $120M+ of adj. EBITDA expected for 2027, the stock remains exposed to execution risk, especially if additional wins do not materialize in 2H26 or if data center construction delays disrupt the thesis.