Benzinga | Dec 1, 2021 08:04AM EST

Citi Initiates RBC Bearings At Neutral, Sees 11% Upside

* Citi analyst Timothy Thein initiated RBC Bearings Inc (NASDAQ:ROLL) with a Neutral rating and a price target of $220, implying an upside of 11.29%.

* The analyst sees a "lot to like" about the Dodge acquisition but says integration could be difficult amid supply chain challenges.

* He believes RBC's current valuation leaves little room for error.

* RBC Bearings announced the Dodge acquisition in July. The company agreed to acquire DODGE mechanical power transmission division for $2.9 billion in cash.

* A fully committed bridge facility supports the acquisition, and financing includes an appropriate mix of debt and equity. The transaction is expected to close in 4Q21.

* Price Action: ROLL shares closed lower by 1.45% at $197.69 on Tuesday.