Emerson Electric Company (EMR) AI Stock Analysis

• Market Cap: $73.03B
• Dividend Yield: 1.58%
• Average Volume (3M): 3.71M
• Price to Earnings (P/E): 30.8
• Beta (1Y): 1.36
• Revenue Growth: 2.97%
• EPS Growth: 18.14%
• Country: US
• Employees: 73,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 1.46
• Shares Outstanding: 562,302,060
• 10 Day Avg. Volume: 2,910,549
• 30 Day Avg. Volume: 3,707,492
• PEG Ratio: 1.82
• Price to Book (P/B): 3.67
• Price to Sales (P/S): 4.13
• P/FCF Ratio: 27.87
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: 4.69
• Enterprise Value/Gross Profit: 9.07
• Enterprise Value/Ebitda: 17.08
• 1Y Price Target: $165.47
• Price Target Upside: 27.40% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): 6.52
• Revenue Forecast (FY): $18.95B

• Rating: 69 Neutral
• Price Target: $142.00 ▲(9.33% Upside)
• Action: Downgraded Date: 02/04/26
• Date: Action: Downgraded 02/04/26

EMR scores well on trend/momentum and a constructive earnings outlook (raised EPS guidance, strong orders/backlog, and committed shareholder returns). The overall score is held back by softer recent cash-flow trajectory and increased leverage, and by a demanding valuation (high P/E with a modest dividend yield).

Positive Factors

Order momentum & sizable backlog

A $7.9B backlog and a 1.13 book-to-bill indicate durable revenue visibility from multi-month to multi-year automation projects. Strong order intake and a large project funnel support forward revenue conversion, smoothing cycles and underpinning organic growth over the next 2–6 months.

High margins and healthy cash conversion

Sustained gross and net margins with solid cash conversion show structural profitability in Emerson's engineered products and services. High margins provide resilience through cyclical demand and fund reinvestment, R&D, and shareholder returns without immediate reliance on new financing.

Growing software & recurring revenue (ACV) and strategic wins

Robust software orders and rising ACV boost recurring revenue and customer stickiness. A growing subscription-like base and strategic automation wins (AI data centers, Roche collaboration) improve revenue predictability, margin durability, and cross-sell potential across hardware and services.

Negative Factors

Rising total debt reduces flexibility

A material increase in total debt compresses financial flexibility and raises leverage risk if cyclical end-markets soften. Higher debt can limit capital allocation optionality for M&A, buybacks or cushioning downturns, and increases sensitivity to rate moves over the medium term.

Softening free cash flow trend

Although FCF covers much of net income, the recent decline in free cash flow growth and weaker operating cash conversion versus prior year signal potential strain on internal funding. Sustained FCF weakness could pressure investment, deleveraging, and the capacity to sustain elevated shareholder returns.

Regional and end-market weakness (China & Europe)

Persistent softness in China and parts of Europe, and weakness in chemicals and transportation, represent structural demand risks for Emerson's industrial exposure. Prolonged regional or sector downturns could slow order conversion and prolong recovery timelines for cyclical segments.

Emerson Electric Company Business Overview & Revenue Model

Company Description

Emerson Electric Co., a technology and engineering company, provides various solutions for customers in industrial, commercial, and residential markets in the Americas, Asia, the Middle East, Africa, and Europe. The company operates through Automation Solutions, and Commercial & Residential Solutions segments. The Automation Solutions segment offers measurement and analytical instrumentation, industrial valves and equipment, and process control software and systems. It serves oil and gas, refining, chemicals, power generation, life sciences, food and beverage, automotive, pulp and paper, metals and mining, and municipal water supplies markets. The Commercial & Residential Solutions segment offers residential and commercial heating and air conditioning products, such as reciprocating and scroll compressors; system protector and flow control devices; standard, programmable, and Wi-Fi thermostats; monitoring equipment and electronic controls for gas and electric heating systems; gas valves for furnaces and water heaters; ignition systems for furnaces; sensors and thermistors for home appliances; and temperature sensors and controls. It also provides reciprocating, scroll, and screw compressors; precision flow controls; system diagnostics and controls; and environmental control systems. In addition, this segment offers air conditioning, refrigeration, and lighting control technologies, as well as facility design and product management, site commissioning, facility monitoring, and energy modeling services; tools for professionals and homeowners; and appliance solutions. Emerson Electric Co. was incorporated in 1890 and is headquartered in Saint Louis, Missouri.

How the Company Makes Money

Emerson makes money mainly by selling industrial automation hardware, software, and related lifecycle services to industrial customers. (1) Product/equipment sales: A significant portion of revenue comes from engineered and configured automation solutions and components such as measurement and analytical instruments (e.g., sensors, transmitters, analyzers), control and safety systems, valves/regulators/actuators, and other automation hardware used in process industries and manufacturing. These sales can be project-driven (e.g., systems delivered for new facilities, expansions, or modernization) or recurring via ongoing replacement/upgrade demand for installed equipment. (2) Software and control platforms: Emerson generates revenue from industrial software and digital tools used for plant control, asset performance, operations optimization, and data/monitoring; this can include license and/or subscription-style revenue depending on the specific offering. Software also supports pull-through demand for Emerson’s hardware and services by embedding its tools into customer workflows. (3) Services and aftermarket/lifecycle support: Emerson earns recurring revenue from installation, commissioning, calibration, maintenance, repair, optimization, training, and other lifecycle services tied to its large installed base. This stream is typically more recurring than project equipment sales and can expand as customers outsource reliability and performance work or adopt digital/remote monitoring. (4) Project and solutions integration economics: For larger automation projects, Emerson can capture revenue across multiple layers—front-end engineering support, system design and integration, delivery of control systems and field devices, and multi-year service agreements—improving total account value and creating longer-duration revenue opportunities. (5) End-market exposure and customer mix: Earnings are influenced by customer capital spending cycles and operating budgets in industries like energy and chemicals, as well as regulatory, safety, and efficiency requirements that drive modernization and compliance investments. Partnerships: null

Emerson Electric Company Financial Statement Overview

Summary

Profitable profile with strong gross margin (~53%) and solid net margin (~13%), plus decent cash conversion (FCF to net income ~0.86). Offsetting this, total debt has risen materially versus 2024 and free cash flow has softened recently; 2023 one-time volatility also reduces clarity on multi-year consistency.

Income Statement

EMR shows solid profitability with gross margin ~53% and net margin ~13% in TTM (Trailing-Twelve-Months), broadly consistent with the latest annual period. Revenue growth is modest in the most recent annual report (~3%), while margins have improved versus 2024 (higher gross and operating margins). A key watch-out is the large volatility in 2023 net income/margins versus other years, suggesting results were impacted by a major non-recurring item and making multi-year comparability less clean.

Balance Sheet

Leverage is moderate with debt-to-equity around ~0.68 in both TTM (Trailing-Twelve-Months) and the latest annual report, and equity is sizable (~$20B) against total assets (~$42B). However, total debt has increased materially versus 2024 (from ~$8.4B to ~$13.8B), reducing balance-sheet flexibility. Returns on equity are steady around ~11% in the most recent periods, but the 2023 return level was unusually high, again pointing to non-recurring impacts that complicate trend assessment.

Cash Flow

Cash generation is generally healthy with free cash flow covering most of net income (free cash flow to net income ~0.86 in both TTM (Trailing-Twelve-Months) and the latest annual period). That said, free cash flow growth is negative recently (slightly down in the latest annual period and more negative in TTM), and operating cash flow is not strongly tracking earnings based on the provided cash coverage measure (notably lower in recent periods versus 2024). Overall, cash flow quality is acceptable but has softened versus the prior year.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	18.18B	18.02B	17.49B	15.16B	13.80B	12.93B
Gross Profit	9.39B	9.52B	8.88B	7.43B	6.31B	5.73B
EBITDA	4.99B	4.86B	4.03B	4.21B	3.50B	2.69B
Net Income	2.31B	2.29B	1.97B	13.22B	3.23B	2.30B
Balance Sheet
Total Assets	41.94B	41.96B	44.25B	42.75B	35.67B	24.71B
Cash, Cash Equivalents and Short-Term Investments	1.75B	1.54B	3.59B	8.05B	1.80B	2.35B
Total Debt	13.92B	13.76B	8.36B	8.56B	10.69B	7.08B
Total Liabilities	21.65B	21.67B	16.74B	16.15B	19.36B	14.79B
Stockholders Equity	20.29B	20.28B	21.64B	20.69B	10.36B	9.88B
Cash Flow
Free Cash Flow	2.58B	2.67B	2.91B	274.00M	2.39B	2.99B
Operating Cash Flow	3.02B	3.10B	3.33B	637.00M	2.92B	3.58B
Investing Cash Flow	-649.00M	-593.00M	-5.36B	12.41B	-5.33B	-2.12B
Financing Cash Flow	-3.51B	-4.51B	-2.46B	-6.82B	2.05B	-2.42B

Emerson Electric Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 129.88
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EMR, the sentiment is Negative. The current price of 129.88 is below the 20-day moving average (MA) of 142.67, below the 50-day MA of 146.45, and below the 200-day MA of 135.93, indicating a bearish trend. The MACD of -4.48 indicates Positive momentum. The RSI at 32.26 is Neutral, neither overbought nor oversold. The STOCH value of 9.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EMR.

Emerson Electric Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PH	80 Outperform	$115.16B	32.82	25.65%	0.79%	0.22%	26.66%
ETN	76 Outperform	$139.85B	30.24	21.67%	1.29%	8.24%	6.21%
ITW	72 Outperform	$75.15B	23.48	95.18%	2.43%	-0.41%	-10.88%
EMR	69 Neutral	$73.03B	30.81	11.61%	1.58%	2.97%	18.14%
ROK	68 Neutral	$39.90B	35.94	27.69%	1.33%	0.98%	-7.51%
CMI	67 Neutral	$75.06B	24.76	24.13%	1.48%	-1.78%	27.35%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Emerson Electric Company Corporate Events

Emerson Establishes New 364-Day $2 Billion Credit Facility

On February 10, 2026, Emerson Electric Co. entered into a new unsecured $2 billion 364-day credit facility with a syndicate of major banks, replacing a prior $3 billion 364-day agreement that had expired. The facility, which runs until February 9, 2027, is structured to support general corporate purposes, notably serving as a liquidity backstop for the company’s commercial paper program, and may be accessed at various interest rate options in U.S. dollars.

Emerson reported that there are currently no outstanding loans or letters of credit under this facility, and it has not drawn on this or similar prior lines, with no present intention to borrow. The agreement allows eligible subsidiaries to be designated as borrowers with Emerson providing unconditional guarantees, and includes customary covenants and default provisions, underscoring the company’s emphasis on maintaining flexible, standby liquidity rather than immediate funding needs.

The most recent analyst rating on (EMR) stock is a Hold with a $155.00 price target. To see the full list of analyst forecasts on Emerson Electric Company stock, see the EMR Stock Forecast page.

Emerson shareholders back directors but reject board declassification

At Emerson Electric Company’s 2026 Annual Meeting of Shareholders, held on February 3, 2026, shareholders elected three directors — Martin S. Craighead, Gloria A. Flach and Matthew S. Levatich — to the board, reaffirmed the company’s executive compensation program in a non-binding advisory vote, and ratified KPMG LLP as the independent registered public accounting firm for fiscal 2026. However, a proposed amendment to Emerson’s Restated Articles of Incorporation to declassify the board of directors failed to obtain the required 85% of outstanding shares in favor, signaling that while shareholders broadly support current leadership and governance practices, there was insufficient consensus to shift to an annually elected board structure at this time.

The most recent analyst rating on (EMR) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on Emerson Electric Company stock, see the EMR Stock Forecast page.