Emerson Electric Company (EMR) AI Stock Analysis

• Market Cap: $73.94B
• Dividend Yield: 1.63%
• Average Volume (3M): 3.52M
• Price to Earnings (P/E): 28.2
• Beta (1Y): 1.21
• Revenue Growth: 4.78%
• EPS Growth: 59.68%
• Country: US
• Employees: 73,000
• Sector: Industrials
• Sector Strength: 75
• Industry: Industrial - Machinery
• EPS (TTM): 1.52
• Shares Outstanding: 562,800,000
• 10 Day Avg. Volume: 2,708,655
• 30 Day Avg. Volume: 3,524,416
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 4.95
• Enterprise Value/Gross Profit: 10.44
• Enterprise Value/Ebitda: 18.62
• 1Y Price Target: $147.23
• Price Target Upside: 13.69% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 73 Outperform
• Price Target: $151.00 ▲(16.60% Upside)

Emerson Electric Company has a solid financial foundation with strong revenue growth and profitability, which is the most significant factor in its stock score. The positive sentiment from the earnings call further supports the outlook, despite valuation concerns and technical analysis limitations. The company's strategic focus on high-growth areas like LNG and life sciences, along with effective tariff mitigation, positions it well for future growth.

Positive Factors

Growth and Earnings

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

Innovation and Technology

The introduction of the new Grid Controller enhances high-speed data capture for electrical substations, demonstrating continued innovation.

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

Demand and Orders

EMR Test & Measurement orders unexpectedly inflected higher but this was attributed to a Tariff pull forward rather than improving demand.

Guidance and Expectations

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.

Market Outlook

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

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 generates revenue through multiple key streams, primarily from the sale of its automation and control products, services, and solutions. The Automation Solutions segment, which includes process management, industrial automation, and software, contributes significantly to the company’s earnings by addressing the needs of various industries for improved efficiency and productivity. The Commercial & Residential Solutions segment focuses on HVAC systems, tools, and appliances, catering to both residential and commercial markets. Additionally, Emerson benefits from long-term service contracts, maintenance agreements, and software subscriptions, which provide recurring revenue. Strategic partnerships with other technology firms and collaborations with industry leaders further enhance its product offerings and market reach, contributing to steady revenue growth.

Emerson Electric Company Financial Statement Overview

Summary

Emerson Electric Company demonstrates a solid financial foundation with consistent revenue growth and profitability margins. The increasing debt levels and reduction in cash reserves warrant close monitoring, but strong free cash flow and equity position provide confidence in sustained performance.

Income Statement

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

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

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.77B	17.49B	15.17B	13.81B	18.23B	16.79B
Gross Profit	8.42B	7.80B	6.90B	5.93B	7.22B	6.78B
EBITDA	4.72B	4.03B	4.04B	3.50B	4.05B	3.36B
Net Income	2.65B	1.97B	2.15B	2.75B	2.30B	1.97B
Balance Sheet
Total Assets	42.52B	44.25B	42.75B	35.67B	24.71B	22.88B
Cash, Cash Equivalents and Short-Term Investments	2.22B	3.59B	8.05B	1.80B	2.35B	3.31B
Total Debt	14.87B	8.20B	8.56B	10.69B	7.08B	7.86B
Total Liabilities	22.63B	16.74B	16.15B	19.36B	14.79B	14.44B
Stockholders Equity	19.87B	21.64B	20.69B	10.36B	9.88B	8.40B
Cash Flow
Free Cash Flow	2.74B	2.91B	274.00M	2.39B	2.99B	2.54B
Operating Cash Flow	3.17B	3.33B	637.00M	2.92B	3.58B	3.08B
Investing Cash Flow	2.74B	-5.36B	12.41B	-5.33B	-2.12B	-740.00M
Financing Cash Flow	-5.98B	-2.46B	-6.82B	2.05B	-2.42B	-509.00M

Emerson Electric Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 129.50
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 129.5 is below the 20-day moving average (MA) of 132.33, below the 50-day MA of 137.06, and above the 200-day MA of 123.14, indicating a neutral trend. The MACD of -1.56 indicates Positive momentum. The RSI at 37.30 is Neutral, neither overbought nor oversold. The STOCH value of 30.69 is Neutral, 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	79 Outperform	$96.20B	27.65	27.42%	0.92%	-0.40%	24.40%
CMI	77 Outperform	$54.90B	18.59	27.56%	1.90%	-1.30%	53.39%
ETN	76 Outperform	$135.92B	34.58	20.76%	1.18%	7.66%	9.19%
EMR	73 Outperform	$73.94B	28.22	10.86%	1.63%	4.78%	59.68%
ROK	73 Outperform	$37.98B	39.64	28.46%	1.55%	-8.23%	-3.29%
ITW	73 Outperform	$77.15B	23.01	109.06%	2.30%	-1.40%	11.65%
Sector *	64 Neutral	$10.66B	15.60	8.14%	2.00%	2.79%	-14.82%

Emerson Electric Company Corporate Events

Emerson Electric Reports Strong Financial Performance in 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.