Barclays: Emerson Electric and Rockwell Automation Resilient Against AI Disruption
Barclays reports that Emerson Electric and Rockwell Automation are well-positioned against potential AI disruption due to their software advantages. Emerson's software business, valued at $1.6 billion annually, boasts key protections including industry-specific expertise and critical applications. Rockwell's software revenue from recurring licenses is under 10% of total sales. Both companies reported strong financial results, with Rockwell surpassing earnings expectations. Goldman Sachs raised Rockwell’s price target to $458, maintaining a Neutral rating.
Theia Market Signal Identification - AI Assisted
Barclays notes that Emerson Electric (NYSE:EMR) and Rockwell Automation (NYSE:ROK) are well-positioned against AI disruption due to their competitive advantages in software. Emerson's software business has a $1.6 billion annual contract value and features three key protections: industry-specific software, critical applications in regulated sectors, and non-user-based pricing.
It reported a 9% annual growth in contract value for Q1 and anticipates over 10% growth by 2026. Rockwell stated that its recurring software revenue accounts for less than 10% of total sales, with limited AI applications due to hardware integration.
Rockwell reported impressive Q1 results for fiscal 2026, with earnings per share of $2.75, exceeding expectations. Goldman Sachs raised Rockwell's price target to $458, citing conservative guidance.
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