Emerson Electric (EMR)
NYSE:EMR
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Emerson Electric Company
(NYSE:EMR)
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Rating:71Outperform
Price Target:
$156.00
â–²(6.59% Upside)
Action:Upgraded
Date:05/09/26
EMR scores well on improving profitability, solid free-cash-flow generation, and a constructive earnings update with raised EPS guidance and strong backlog/funnel visibility. The score is held back by a relatively high valuation (P/E ~29.7, modest yield) and only neutral technical momentum, alongside noted geopolitical/China and software renewal-related near-term risks.
Positive Factors
Free cash flow generation
Consistent multi-billion-dollar free cash flow provides durable funding for capex, buybacks and dividends, underpins earnings quality and reduces reliance on external financing. FCF close to reported earnings indicates strong cash conversion that supports strategic reinvestment and shareholder returns.
Negative Factors
Increased leverage vs prior year
Marked rise in leverage reduces financial flexibility and increases interest and covenant sensitivity, limiting capacity to fund opportunistic M&A or cushion cyclic downturns. Higher debt relative to recent years elevates refinancing and cash-flow risk during prolonged industry weakness.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow generation
Consistent multi-billion-dollar free cash flow provides durable funding for capex, buybacks and dividends, underpins earnings quality and reduces reliance on external financing. FCF close to reported earnings indicates strong cash conversion that supports strategic reinvestment and shareholder returns.
Read all positive factors
Emerson Electric Company Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyEmerson Electric Company (EMR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$76.41B
Dividend Yield1.58%
Average Volume (3M)2.94M
Price to Earnings (P/E)29.7
Beta (1Y)1.38
Revenue Growth4.03%
EPS Growth3.51%
CountryUS
Employees73,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)4.35
Shares Outstanding560,100,000
10 Day Avg. Volume3,018,373
30 Day Avg. Volume2,942,241
Financial Highlights & Ratios
PEG Ratio1.77
Price to Book (P/B)3.64
Price to Sales (P/S)4.10
P/FCF Ratio27.68
Enterprise Value/Market Cap1.15
Enterprise Value/Revenue4.80
Enterprise Value/Gross Profit9.12
Enterprise Value/Ebitda17.12
Forecast
1Y Price Target
$164.83Price Target Upside12.63% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)6.5
Revenue Forecast (FY)$18.83B
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 Automa...
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 s...
Emerson Electric Company Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Positive
The call presented a predominantly constructive operational and financial picture: solid order momentum, healthy growth in Test & Measurement and power, strong backlog and funnel expansion, disciplined pricing and cost actions, raised EPS guidance, and continued shareholder returns. Headwinds include a material but localized Middle East disruption, a meaningful China slowdown tied to chemicals, and a temporary software contract renewal dynamic that depressed software sales and margins in the quarter. Management conveyed confidence in second-half execution while acknowledging geopolitical and renewal-related uncertainties.Positive Updates
Geographic and Vertical Strength — US and Growth Verticals
North America (U.S.) showed strength with Americas up 5% and the U.S. up 9%; growth verticals (power, LNG, life sciences, semiconductors, aerospace & defense) were up 22% in the quarter and are expected to be multi‑year drivers.
Negative Updates
Middle East Conflict Impact
Conflict in the Middle East caused a ~1 percentage point hit to underlying sales in Q2 (about $50 million in the quarter and an estimated additional ~$100 million disruption to be realized), field service levels fell below 50% in March and were operating at ~80% by mid‑April; 47 customer sites reported some damage and logistics via the Strait of Hormuz remain disrupted, increasing freight costs.
Read all updates
Q2-2026 Updates
Positive
Negative
Geographic and Vertical Strength — US and Growth Verticals
North America (U.S.) showed strength with Americas up 5% and the U.S. up 9%; growth verticals (power, LNG, life sciences, semiconductors, aerospace & defense) were up 22% in the quarter and are expected to be multi‑year drivers.
Read all positive updates
Company Guidance
Emerson updated 2026 guidance with GAAP sales growth of ~4.5% and underlying sales growth of ~3% (ex-software-renewal growth ~4%), an FX tailwind of ~1.5%, and adjusted segment EBITDA margin of ~28%; adjusted EPS was raised to $6.45–$6.55 (Q2 EPS $1.54; Q3 EPS guide $1.65–$1.70), free cash flow is targeted at $3.5–$3.6B (H1 cash flow $694M, 15% margin; on track for ~10% FCF growth at >18% margin), ACV expected to finish up 10%+ (Q2 ACV $1.64B, +9% YoY), backlog $8.2B (+9% YoY) with a project funnel of $11.2B, book-to-bill 1.07, and ~$2.2B capital return for the year ($1.2B dividends, $1.0B repurchases; $542M repurchased in H1); Q3 sales growth ~5.5% (underlying ~5%) with segment pacing: Software & Systems ~+5% FY (Q3 ~+8%), Test & Measurement Q3 mid‑teens / FY low‑teens, Control Systems mid‑/low‑single, Intelligent Devices Q3 +4% / FY ~+2%, Safety & Productivity Q3 +1% / FY +2%; guidance includes a modeled one‑point 2026 headwind from the Middle East conflict (≈$150M disruption, with ~$100M near‑term rebuild/restart opportunity).Emerson Electric Company Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
67
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 18.32B | 18.02B | 17.49B | 15.16B | 13.80B | 12.93B |
| Gross Profit | 9.64B | 9.52B | 8.88B | 7.43B | 6.31B | 5.73B |
| EBITDA | 5.14B | 4.84B | 4.03B | 4.21B | 3.50B | 2.69B |
| Net Income | 2.44B | 2.29B | 1.97B | 13.22B | 3.23B | 2.30B |
Balance Sheet | ||||||
| Total Assets | 42.09B | 41.96B | 44.25B | 42.75B | 35.67B | 24.71B |
| Cash, Cash Equivalents and Short-Term Investments | 1.79B | 1.54B | 3.59B | 8.05B | 1.80B | 2.35B |
| Total Debt | 13.36B | 13.76B | 8.36B | 8.56B | 10.69B | 7.08B |
| Total Liabilities | 21.77B | 21.67B | 16.74B | 16.15B | 19.36B | 14.79B |
| Stockholders Equity | 20.30B | 20.28B | 21.64B | 20.69B | 10.36B | 9.88B |
Cash Flow | ||||||
| Free Cash Flow | 3.12B | 2.67B | 2.91B | 274.00M | 2.39B | 2.99B |
| Operating Cash Flow | 3.56B | 3.10B | 3.33B | 637.00M | 2.92B | 3.58B |
| Investing Cash Flow | -608.00M | -593.00M | -5.36B | 12.41B | -5.33B | -2.12B |
| Financing Cash Flow | -3.07B | -4.51B | -2.46B | -6.82B | 2.05B | -2.42B |
Emerson Electric Company Technical Analysis
Positive
146.35
Price Trends
136.31
Positive
141.23
Negative
136.15
Positive
Market Momentum
-0.82
Negative
55.82
Neutral
75.15
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EMR, the sentiment is Positive. The current price of 146.35 is above the 20-day moving average (MA) of 137.16, above the 50-day MA of 136.31, and above the 200-day MA of 136.15, indicating a bullish trend. The MACD of -0.82 indicates Negative momentum. The RSI at 55.82 is Neutral, neither overbought nor oversold. The STOCH value of 75.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $109.31B | 31.24 | 24.69% | 0.79% | 6.03% | 4.26% | |
77 Outperform | $50.33B | 28.74 | 30.25% | 1.33% | 10.45% | 21.30% | |
76 Outperform | $88.25B | 28.44 | 22.02% | 1.48% | 0.06% | -4.25% | |
73 Outperform | $151.96B | 40.08 | 20.81% | 1.29% | 12.68% | 3.12% | |
71 Outperform | $76.41B | 29.72 | 12.11% | 1.58% | 4.03% | 3.51% | |
70 Outperform | $72.56B | 24.43 | 97.38% | 2.43% | 2.90% | -5.25% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
EMR
Emerson Electric Company
140.97
21.94
18.43%
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ROK
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456.30
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47.80%
Emerson Electric Company Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Emerson Electric Posts Strong Q2 Results, Reaffirms 2026 Outlook
Positive
May 5, 2026
On May 5, 2026, Emerson reported results for its second quarter ended March 31, 2026, posting a 3% rise in net sales to $4.56 billion, a 28% jump in GAAP EPS to $1.10 and a 5% increase in underlying orders, while margins improved despite sales hea...
Business Operations and StrategyPrivate Placements and Financing
Emerson Establishes New 364-Day $2 Billion Credit Facility
Neutral
Feb 13, 2026
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,...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.