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Emerson Electric Company (EMR)
NYSE:EMR
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Emerson Electric Company
(NYSE:EMR)
70Outperform
Positive Factors
Financial performance
Favorable position in markets with still positive underlying long-term fundamentals coupled with a strong track record of operational execution that should drive outsized financial returns.
Growth prospects
There is a significant opportunity in LNG with over $1B in potential orders expected, indicating future revenue growth.
Market position
Emerson is a likely beneficiary of US power generation additions, given its leading market position.
Negative Factors
Deal economics
The raised price weighs on deal economics & ability to remain EPS neutral.
EPS impact
A divesture of the Safety & Productivity segment would likely be EPS dilutive.
Order growth
Underlying orders growth decelerated to +1% y/y from +2% last quarter, raising investor concerns.
Emerson Electric Company (EMR) vs. S&P 500 (SPY)
Market Cap
$59.37B
Dividend Yield2%
Average Volume (3M)3.48M
Price to Earnings (P/E)25.0
Beta (1Y)1.19
Revenue Growth10.29%
EPS Growth22.72%
CountryUS
Employees73,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)4.20
Shares Outstanding563,900,000
10 Day Avg. Volume3,007,783
30 Day Avg. Volume3,478,399
Financial Highlights & Ratios
PEG Ratio1.10
Price to Book (P/B)N/A
Price to Sales (P/S)3.63
Price to Cash Flow (P/CF)20.50
P/FCF Ratio23.00
Enterprise Value/Market Cap1.38
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit10.51
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$127.07Price Target Upside20.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
Emerson Electric Company Business Overview & Revenue Model
Company DescriptionEmerson Electric Company (EMR) is a global technology and engineering company providing innovative solutions for customers in industrial, commercial, and residential markets. The company operates through two primary business segments: Automation Solutions and Commercial & Residential Solutions. Emerson's core products and services include industrial automation equipment, process control systems, climate technologies, and tools for various applications, enabling enhanced operational efficiency and sustainability for its clients.
How the Company Makes MoneyEmerson Electric Company generates revenue through the sale of its products and services within its two main business segments. The Automation Solutions segment offers industrial automation products, control systems, and software that help industries optimize processes, reduce waste, and improve safety. This segment caters to sectors such as oil and gas, chemical, and power generation. The Commercial & Residential Solutions segment provides climate technologies, including heating, ventilation, air conditioning (HVAC) systems, and refrigeration products, as well as tools and home products for residential and commercial customers. Emerson's earnings are further supported by strategic partnerships and a strong global distribution network, which enhance its market presence and customer reach.
Emerson Electric Company Financial Statement Overview
Summary
Emerson Electric Company demonstrates financial stability with strong cash flow generation and prudent debt management. Despite operational challenges impacting EBIT, profitability and cash position remain strong, supporting potential future growth.Income Statement
Emerson Electric Company has a strong gross profit margin of 43.3% and a good net profit margin of 13.8% for the TTM. However, the EBIT margin is negative, indicating operational challenges. Revenue growth is modest at 0.3% annually, suggesting stability with limited growth.75
Positive
Balance Sheet
The company maintains a solid debt-to-equity ratio of 0.29, indicating prudent leverage management. The return on equity stands at 9.2%, showing decent profitability for shareholders. The equity ratio of 61.9% reflects a strong capital structure, minimizing financial risk.80
Positive
Cash Flow
Emerson Electric exhibits robust free cash flow growth of 12.2% and a high free cash flow to net income ratio of 1.35. The operating cash flow to net income ratio of 1.53 indicates strong cash generation relative to net income, supporting financial flexibility.85
Very Positive
| Breakdown | ||||
| Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 17.49B | 15.16B | 19.63B | 18.24B | 16.79B | Gross Profit |
| 7.81B | 7.43B | 8.19B | 7.56B | 7.01B | EBIT |
| 2.67B | 2.83B | 3.88B | 3.22B | 2.49B | EBITDA |
| 3.88B | 4.04B | 3.50B | 4.05B | 3.36B | Net Income Common Stockholders |
| 1.97B | 13.22B | 3.23B | 2.30B | 1.97B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.59B | 8.05B | 1.80B | 2.35B | 3.31B | Total Assets |
| 44.25B | 42.75B | 35.67B | 24.71B | 22.88B | Total Debt |
| 7.69B | 8.16B | 10.37B | 6.67B | 7.49B | Net Debt |
| 4.10B | 106.00M | 8.57B | 4.31B | 4.17B | Total Liabilities |
| 16.74B | 16.15B | 19.36B | 14.79B | 14.44B | Stockholders Equity |
| 21.64B | 20.69B | 10.36B | 9.92B | 8.45B |
| Cash Flow | Free Cash Flow | |||
| 2.91B | 274.00M | 2.39B | 2.99B | 2.54B | Operating Cash Flow |
| 3.33B | 637.00M | 2.92B | 3.58B | 3.08B | Investing Cash Flow |
| -5.36B | 12.41B | -5.33B | -2.12B | -740.00M | Financing Cash Flow |
| -2.46B | -6.82B | 2.05B | -2.42B | -509.00M |
Emerson Electric Company Technical Analysis
Neutral
105.28
Price Trends
110.82
Negative
118.55
Negative
114.59
Negative
Market Momentum
-2.56
Negative
50.86
Neutral
73.95
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EMR, the sentiment is Neutral. The current price of 105.28 is above the 20-day moving average (MA) of 101.97, below the 50-day MA of 110.82, and below the 200-day MA of 114.59, indicating a neutral trend. The MACD of -2.56 indicates Negative momentum. The RSI at 50.86 is Neutral, neither overbought nor oversold. The STOCH value of 73.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for EMR.
Emerson Electric Company Risk Analysis
Emerson Electric Company disclosed 17 risk factors in its most recent earnings report. Emerson Electric Company reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Emerson Electric Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $59.89B | 39.01 | 8.53% | 0.55% | 13.94% | 13.02% | |
76 Outperform | $113.15B | 30.40 | 20.23% | 1.34% | 7.25% | 18.36% | |
74 Outperform | $70.26B | 20.45 | 110.24% | 2.46% | -1.30% | 20.26% | |
70 Outperform | $59.37B | 25.04 | 9.66% | 2.00% | 10.29% | 22.72% | |
67 Neutral | $28.09B | 30.91 | 26.22% | 2.06% | -11.28% | -23.69% | |
66 Neutral | $77.00B | 24.69 | 25.87% | 1.09% | 0.41% | 19.76% | |
63 Neutral | $4.27B | 11.40 | 5.38% | 214.63% | 4.11% | -8.98% |
* Industrials Sector Average
Performance Comparison
EMR
Emerson Electric Company
105.28
-2.53
-2.35%
ETN
Eaton
288.82
-33.53
-10.40%
ITW
Illinois Tool Works
239.50
-3.92
-1.61%
PH
Parker Hannifin
598.02
49.34
8.99%
ROK
Rockwell Automation
248.38
-26.45
-9.62%
ROP
Roper Technologies
557.70
47.07
9.22%
Emerson Electric Company Earnings Call Summary
Earnings Call Date:Feb 05, 2025
(Q1-2025)
| % Change Since: -17.20%|
Next Earnings Date:May 07, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance with record profit margins and free cash flow, alongside successful portfolio transformation and innovation recognition. However, discrete orders and demand in China posed challenges, alongside FX headwinds.Q1-2025 Updates
Positive Updates
Record Profit Margins
Gross profit margin reached a record 53.5%, with adjusted segment EBITDA margins of 28%, a 340 basis point improvement due to strong operational performance and cost management.
Strong Free Cash Flow
Free cash flow for Q1 2025 was $694 million, up 89% versus Q1 2024, with a margin of approximately 17%.
Successful Portfolio Transformation
Emerson reached an agreement to acquire outstanding shares of AspenTech, furthering its portfolio transformation.
Recognition for Innovation
Emerson's DeltaV Edge Environment won the 2024 Processing Breakthrough Product award and the 2025 IoT Breakthrough Award for industrial IoT innovation.
Strong Segment Performance
Software and control grew 4% while intelligent devices grew 2%, supported by strong performance in energy transition and life sciences segments.
Negative Updates
Discrete Orders Softness
Discrete businesses, including safety and productivity, were down approximately 4%, with continued softness in automotive and factory automation sectors.
Muted Demand in China
Demand in China remained muted, with strength in power offset by weakness in chemical and discrete end markets.
Foreign Exchange Headwinds
FX movements unfavorably impacted adjusted EPS by approximately $0.08, prompting a lower GAAP net sales guidance.
Company Guidance
During the Emerson First Quarter 2025 Earnings Conference Call, the company reiterated its guidance for underlying sales, adjusted earnings per share (EPS), and free cash flow for the year. Emerson reported a 2% increase in underlying sales, driven by a 5% growth in process and hybrid businesses, while discrete businesses experienced a 4% decline. The company achieved record gross profit margins of 53.5% and adjusted segment EBITDA margins of 28%, a 340 basis point improvement. Adjusted EPS grew by 13% to $1.38, and free cash flow was $694 million, up 89% from the previous year. Emerson raised its expectations for operating leverage to the 70s from the mid-40s, driven by strong operational performance and adjusted for foreign exchange fluctuations. The company also highlighted a significant project funnel of $11.5 billion, with substantial opportunities in LNG and power markets.Emerson Electric Company Corporate Events
Business Operations and StrategyFinancial Disclosures
Emerson Electric Reports Strong Financial Performance in 2024
Positive
Nov 5, 2024
Emerson reported strong financial performance for fiscal year 2024, with a 15% increase in net sales to $17.5 billion and a rise in adjusted earnings per share by 24% to $5.49. The company highlights its strategic transformation towards becoming a leader in industrial technology by integrating Test & Measurement, realizing significant synergies, and maintaining a focus on automation solutions. Emerson’s solid results and future strategic actions aim to deliver continued growth and value for shareholders in 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.