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Is It Time to Buy Cyclical Stocks Like Rockwell Automation?


It's no secret that the industrial sector is slowing in 2019, and a slew of companies have reported weakness in the current earnings season. Given that Rockwell Automation (NYSE: ROK) is one of the most cyclically exposed companies on the market, it's hardly surprising to see the company cut its full-year earnings guidance. That said, such situations can throw up buying opportunities, and Rockwell is a company with exposure to some very attractive end markets. Let's take a closer look.

When industrial companies see slowing end markets, the first thing they look to do is cut expansionary capital expenditures, and that's why sales of Rockwell's automation solutions come under threat in any slowdown. A quick look at the evolution of the company's guidance through 2019 shows how end-market conditions have gotten progressively worse. As a reminder, Rockwell's financial year runs to the end of September.

Full-Year 2019 Guidance

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