Emerson Electric Company (EMR) AI Stock Analysis

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Emerson Electric Company

(NYSE:EMR)

Rating:69Neutral

Price Target:

$161.00

▲(9.66%Upside)

Emerson Electric's overall stock score is driven by strong earnings call results and solid financial performance. However, the valuation concerns and mixed technical indicators present challenges. The company's strategic acquisitions and positive guidance provide a robust outlook, but caution is warranted due to potential overvaluation and technical overbought signals.

Positive Factors

Financial Performance

EMR should grow faster than it has historically and with higher margin.

Innovation and Technology

The company's transformation into an industrial automation 'pure play' positions it as a leader in technology.

Market Position

Emerson continues to invest in core innovation, maintaining a strong market position and capturing market share in key areas like Life Sciences and BioPharma.

Negative Factors

Guidance and Forecasts

EMR organic guidance is viewed as overly aggressive with management calling for a high single-digit organic exit rate, a sharp acceleration despite sluggish order trends and softening Process capex.

Order Trends

Guidance for a high single-digit fourth quarter exit rate screens for downside compared to past performance and unchanged low single-digit order trends.

Tariff Impact

Tariffs are a $245mn headwind to FY25, or 2.5% of revenue on an annualized basis.

Emerson Electric Company (EMR) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$82.59B

Dividend Yield1.44%

Average Volume (3M)2.79M

Price to Earnings (P/E)35.1

Beta (1Y)1.18

Revenue Growth6.49%

EPS Growth24.14%

CountryUS

Employees73,000

SectorIndustrials

Sector Strength94

IndustryIndustrial - Machinery

Share Statistics

EPS (TTM)1.48

Shares Outstanding562,500,000

10 Day Avg. Volume2,452,716

30 Day Avg. Volume2,792,124

Financial Highlights & Ratios

PEG Ratio-73.20

Price to Book (P/B)4.30

Price to Sales (P/S)0.00

P/FCF Ratio29.91

Enterprise Value/Market Cap1.16

Enterprise Value/Revenue1.37

Enterprise Value/Gross Profit10.29

Enterprise Value/Ebitda5.52

Forecast

1Y Price Target

$144.13

Price Target Upside-1.83% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering15

Emerson Electric Company Business Overview & Revenue Model

Company DescriptionEmerson Electric Company (EMR) is a global technology and engineering company that provides innovative solutions across various industries. The company is primarily involved in two key sectors: Automation Solutions and Commercial & Residential Solutions. Emerson offers a range of products and services designed to improve operational efficiency and performance, including process automation technologies, climate technologies, and tools for commercial and residential applications.

How the Company Makes MoneyEmerson Electric Company generates revenue through the sale of its products and services across its two main business segments: Automation Solutions and Commercial & Residential Solutions. In the Automation Solutions segment, Emerson provides technologies and services that help industries optimize their operations, including process control systems, measurement instrumentation, and digital transformation solutions. This segment serves industries such as oil and gas, chemical, and industrial manufacturing. The Commercial & Residential Solutions segment offers products and services that enhance comfort and energy efficiency in homes and businesses, including HVAC systems, refrigeration technologies, and tools. Emerson's revenue model is supported by a combination of direct sales to end-users, sales through distributors, and long-term service agreements. The company also benefits from strategic partnerships and acquisitions that expand its technological capabilities and market reach.

Emerson Electric Company Key Performance Indicators (KPIs)

Any

Intelligent Devices Revenue Breakdown

Intelligent Devices Revenue Breakdown
Analyzes revenue from intelligent devices, indicating demand for automation and smart technology solutions and the company’s strength in this innovative market.

Chart InsightsEmerson's Intelligent Devices segment shows a mixed performance. Final Control and Measurement and Analytical segments are experiencing steady growth, driven by strong demand in Process and Hybrid markets. However, Discrete Automation faces challenges, with a decline in revenue, particularly in Europe and China. Despite these challenges, Emerson's acquisition of AspenTech and effective tariff mitigation strategies are expected to support a recovery in discrete sales in the second half of 2025, aligning with the company's positive outlook and strategic focus on enhancing profitability and shareholder returns.

Data provided by:

Main Street Data

Emerson Electric Company Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q2-2025)

% Change Since: 37.47%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Neutral

Emerson demonstrated strong performance in the second quarter with record profitability and positive growth in key markets like Process and Hybrid. However, challenges remain in China and factory automation, along with the impact of tariffs. Despite these challenges, Emerson's positive outlook for the second half and strong cash flow contribute to a balanced overall sentiment.

Q2-2025 Updates

Positive Updates

Strong Second Quarter Performance

Emerson delivered a strong second quarter with underlying orders growth of 4%, exceeding expectations. All regions, including China, showed positive performance. Adjusted earnings per share exceeded guidance by $0.06.

Record Profitability

Gross profit margin of 53.5% improved by 130 basis points year-over-year. Adjusted segment EBITDA margin reached 28%, a 200 basis point improvement from the previous year.

Growth in Process and Hybrid Markets

Process and Hybrid businesses reported sales growth of mid-single digits, driven by significant capital investments in energy and LNG projects.

AspenTech Acquisition and Integration

AspenTech acquisition completed, expected to be modestly accretive to adjusted EPS in 2025. Targeting $100 million of cost synergies by 2028.

Positive Outlook for Second Half

Emerson is guiding for an underlying sales growth of approximately 4% for the full year, with expectations for accelerating growth in the second half.

Strong Free Cash Flow

Emerson generated strong free cash flow of $738 million, a margin of 17%, up 14% year-over-year.

Negative Updates

Challenges in China and Factory Automation

Continued weakness in China, specifically bulk chemical, and muted expectations for factory automation recovery.

Tariff Impact and Mitigation

Gross incremental tariff impact on US imports expected to be $185 million in 2025. Total gross impact in 2025 expected to be $245 million.

Discrete Business Challenges

Discrete businesses were still down approximately 1% year-over-year, with pronounced weakness in Europe and China.

Company Guidance

During the Emerson Second Quarter 2025 Earnings Conference Call, Emerson's President and CEO, Lal Karsanbhai, provided detailed guidance reflecting confidence in the company's performance and future outlook. Emerson reported a strong second quarter with underlying orders growth of 4%, led by a 6% increase in Process and Hybrid businesses and an 8% rise in Test and Measurement. Underlying sales came in at the top of the guide with record margin performance, and adjusted earnings per share exceeded guidance by $0.06. Emerson projected 4% underlying sales growth for the year and raised the midpoint of its adjusted EPS guide to between $5.90 and $6.05 per share. The company expects to generate $3.1 billion to $3.2 billion in free cash flow and plans to return $2.3 billion to shareholders through dividends and share repurchases. Additionally, Emerson completed the acquisition of AspenTech, expecting it to be modestly accretive to adjusted EPS in 2025, while targeting $100 million of cost synergies by 2028. The company also anticipates a significant second-half recovery in discrete sales, driven by its strong global footprint and effective tariff mitigation strategies, with a gross exposure of $245 million in 2025 expected to be fully offset.

Emerson Electric Company Financial Statement Overview

Summary

Emerson Electric Company shows a stable financial performance with consistent revenue growth and healthy profit margins. Despite increasing debt levels and reduced cash reserves, strong free cash flow and a solid equity position ensure sustained performance.

Income Statement

Positive

The company's revenue growth is stable with a slight increase in the TTM period compared to the previous annual period, showing resilience in a competitive industry. Gross and net profit margins are healthy, reflecting efficient cost management. However, EBIT and EBITDA margins have shown slight variability, indicating some operational challenges.

Balance Sheet

Positive

The balance sheet shows a strong equity base with a reasonable debt-to-equity ratio, though there has been an increase in total debt over the TTM period. The equity ratio suggests solid asset coverage, but rising liabilities could pose future leverage challenges.

Cash Flow

Very Positive

Operating cash flow remains strong and aligns well with net income, indicating good cash conversion. Free cash flow has grown, suggesting improved efficiency in capital expenditure. However, the decrease in cash and cash equivalents highlights potential liquidity concerns.

Breakdown	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	17.49B	15.16B	13.80B	12.93B	16.79B
Gross Profit	8.88B	7.43B	6.31B	5.73B	7.01B
EBITDA	4.03B	4.21B	3.50B	2.69B	3.36B
Net Income	1.97B	13.22B	3.23B	2.30B	1.97B
Balance Sheet
Total Assets	44.25B	42.75B	35.67B	24.71B	22.88B
Cash, Cash Equivalents and Short-Term Investments	3.59B	8.05B	1.80B	2.35B	3.31B
Total Debt	8.20B	8.16B	10.37B	6.67B	7.49B
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

Technical Analysis Sentiment

Positive

Last Price146.82

Price Trends

50DMA

129.84

Positive

100DMA

118.62

Positive

200DMA

120.20

Positive

Market Momentum

MACD

4.82

Negative

RSI

79.12

Negative

STOCH

92.15

Negative

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 146.82 is above the 20-day moving average (MA) of 139.97, above the 50-day MA of 129.84, and above the 200-day MA of 120.20, indicating a bullish trend. The MACD of 4.82 indicates Negative momentum. The RSI at 79.12 is Negative, neither overbought nor oversold. The STOCH value of 92.15 is Negative, 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

Overall Rating

UnderperformOutperform

Sector (68)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ETN	81 Outperform	$150.61B	38.38	20.84%	1.03%	7.00%	16.84%
PH	77 Outperform	$93.04B	28.03	27.16%	0.92%	-0.23%	22.41%
ITW	77 Outperform	$76.72B	23.17	107.62%	2.29%	-1.85%	12.04%
ROP	75 Outperform	$60.25B	39.14	8.15%	0.58%	13.59%	6.52%
EMR	69 Neutral	$82.59B	35.05	9.82%	1.44%	6.49%	24.14%
ROK	69 Neutral	$40.35B	45.07	25.86%	1.45%	-11.19%	-22.50%
Sector *	68 Neutral	€2.78B	22.93	7.73%	2.84%	-1.29%	-31.61%

* Industrials Sector Average

Performance Comparison

EMR

Emerson Electric Company

146.82

32.04

27.91%

ETN

Eaton

384.90

91.04

30.98%

ITW

Illinois Tool Works

261.83

20.15

8.34%

Parker Hannifin

729.62

180.69

32.92%

ROK

Rockwell Automation

357.01

84.95

31.22%

ROP

Roper Technologies

560.36

15.05

2.76%

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

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.Date of analysis: Jul 24, 2025