Emerson Electric Co.
EMR
$131.02
+6.26%
Emerson Electric Co. is a leading industrial automation company operating in the Industrial - Machinery sector. It has transformed into a pure-play automation provider through strategic acquisitions and divestitures, focusing on automation software, power tools, and hardware.
EMR
Emerson Electric Co.
$131.02
Investment Opinion: Should I buy EMR Today?
Based on a synthesis of the data, the objective assessment is a Hold. The stock's sharp decline has brought its forward P/E to a more reasonable level, and its strategic focus and cash flow generation are positive. However, the severe technical breakdown, liquidity concerns, and mixed analyst sentiment warrant caution. Investors may consider waiting for signs of price stabilization or a more attractive entry point before establishing new positions.
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EMR 12-Month Price Forecast
The analysis leans neutral due to conflicting signals: attractive fundamentals and valuation are offset by severe technical damage and financial liquidity concerns. The base case of range-bound trading is most probable over the next 12 months.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Emerson Electric Co.'s 12-month outlook, with a consensus price target around $170.33 and implied upside of +30.0% versus the current price.
Average Target
$170.33
7 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
7
covering this stock
Price Range
$105 - $170
Analyst target range
Based on the provided institutional ratings, analyst sentiment appears mixed with a tilt towards neutral or cautious optimism. Recent actions include firms like Deutsche Bank downgrading from 'Buy' to 'Hold', while Citigroup and UBS maintain or upgraded to 'Buy' ratings. Other major firms like Wells Fargo, Barclays, and Stephens & Co. have 'Equal Weight' or equivalent ratings. The data includes 7 analysts providing estimates, with an average EPS forecast of $9.12 and average revenue forecast of $22.66 billion. No specific consensus target price is provided in the data.
Bulls vs Bears: EMR Investment Factors
Emerson presents a dichotomy of strong long-term fundamentals in industrial automation against significant near-term headwinds. The stock's sharp correction has improved its valuation, but investor sentiment remains cautious due to recent underperformance and mixed analyst views.
Bullish
- Strategic Pure-Play Focus: Divestitures created a focused automation leader with long-term growth potential.
- Strong Free Cash Flow: $2.58B TTM FCF provides flexibility for dividends, buybacks, and M&A.
- Attractive Forward Valuation: Forward P/E of 17.2 is reasonable for a profitable industrial company.
- Solid Profitability Metrics: Net margin of 13.9% and ROE of 11.3% indicate efficient operations.
Bearish
- Severe Recent Price Correction: Stock down 18.2% in one month, showing significant technical weakness.
- Liquidity Constraint: Current ratio of 0.88 suggests potential difficulty meeting short-term obligations.
- High Trailing P/E Ratio: Trailing P/E of 32.4 is elevated, indicating high expectations.
- Mixed Analyst Sentiment: Recent downgrades and equal-weight ratings reflect near-term caution.
EMR Technical Analysis
Overall Assessment: The stock has experienced significant volatility over the past six months, with a notable rally from around $131 in October 2025 to a peak near $161 in February 2026, followed by a sharp correction. As of the current date, the price has declined 18.21% over the past month and 8.86% over the past three months, underperforming the broader market (SPY) by -10.34% and -1.54% respectively over those periods.
Short-term Performance: The 1-month performance of -18.21% is severe, driven by a drop from above $150 in late February to $123.3 by March 30, 2026. The 3-month performance of -8.86% reflects the stock giving back most of its gains from the early 2026 rally. The price action shows a clear downtrend in March.
Current Position: The current price of $123.3 is significantly below the 52-week high of $165.15 and closer to the 52-week low of $90.06, positioning it in the lower half of its yearly range. The stock's beta of 1.243 indicates it is more volatile than the market, which is consistent with the observed price swings.
Beta
1.24
1.24x market volatility
Max Drawdown
-23.7%
Largest decline past year
52-Week Range
$90-$165
Price range past year
Annual Return
+19.5%
Cumulative gain past year
| Period | EMR Return | S&P 500 |
|---|---|---|
| 1m | -13.1% | -5.3% |
| 3m | -1.3% | -4.6% |
| 6m | -1.5% | -2.8% |
| 1y | +19.5% | +15.9% |
| ytd | -3.5% | -4.6% |
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EMR Fundamental Analysis
Revenue & Profitability: For the most recent quarter (Q1 2026 ending Dec 31, 2025), revenue was $4.345 billion, representing a year-over-year growth of 4.07% from the prior year's Q1. The net income margin for the quarter was 13.92%, showing improvement from the 13.12% margin in the previous quarter (Q4 2025). The trailing twelve-month net margin is 12.73%.
Financial Health: The company's debt-to-equity ratio is 0.68, indicating a moderate level of leverage. The current ratio is 0.88, which suggests potential liquidity constraints in covering short-term obligations. Free cash flow over the trailing twelve months is a healthy $2.575 billion, providing financial flexibility.
Operational Efficiency: Return on Equity (ROE) stands at 11.31%, and Return on Assets (ROA) is 6.61%. The gross margin for the latest quarter was 48.56%, while the operating margin was 19.88%. These metrics indicate reasonable operational efficiency and profitability.
Quarterly Revenue
$4.3B
2025-12
Revenue YoY Growth
+0.04%
YoY Comparison
Gross Margin
+0.48%
Latest Quarter
Free Cash Flow
$2.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is EMR Overvalued?
Valuation Level: Given that Net Income is positive ($605 million in the latest quarter), the primary valuation metric is the Price-to-Earnings (P/E) ratio. The trailing P/E ratio is 32.42, while the forward P/E is 17.19, suggesting the market expects significant earnings growth. The Price-to-Sales (P/S) ratio is 4.13, and the Enterprise Value to EBITDA (EV/EBITDA) is 17.81.
Peer Comparison: Data not available for direct industry average comparisons. However, the forward P/E of 17.2 and PEG ratio of 1.82 suggest the stock is priced for growth relative to its expected earnings trajectory. The Price-to-Book (P/B) ratio of 3.67 indicates the market values the company's assets at a premium.
PE
32.4x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 1x~98x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
17.8x
Enterprise Value Multiple
Investment Risk Disclosure
The primary risk is the stock's high volatility (beta of 1.24) and recent severe underperformance relative to the market, down 18.2% over one month. This suggests heightened sensitivity to macroeconomic conditions and potential sector rotation away from industrials. Financial risk is moderate, with a debt-to-equity ratio of 0.68, but the current ratio of 0.88 indicates a liquidity concern that could pressure operations if the business environment weakens. Operational risks include the company's ability to maintain its growth trajectory (4.1% YoY revenue growth in Q1) and profitability margins in the face of potential economic slowdowns, given its pure-play automation focus. The elevated trailing P/E ratio of 32.4 also creates valuation risk if earnings growth fails to meet expectations.
FAQ
Key risks include high stock volatility (beta of 1.24), as evidenced by the 18% monthly drop. Financial risk stems from a current ratio of 0.88, which could pressure short-term liquidity. There is also execution risk in maintaining its 4% revenue growth and 14% net margin. The stock's sensitivity to broader economic cycles is a significant market risk.
The 12-month outlook presents a base case (55% probability) for the stock to trade between $125 and $145, reflecting its current valuation and growth profile. A bull case (25%) could see a recovery towards $150-$165, while a bear case (20%) might test support down to $100-$120. The primary driver will be the company's ability to meet the analyst EPS consensus of $9.12.
The valuation is mixed. The trailing P/E of 32.4 appears high, but the forward P/E of 17.2 suggests the market expects solid earnings growth. The PEG ratio of 1.82 indicates the stock is priced for growth but not excessively so. Following the recent correction, the stock is likely closer to fair value rather than being significantly overvalued or undervalued.
Currently, EMR is assessed as a Hold. The recent 18% price drop has improved its forward P/E to 17.2, which is reasonable. However, the sharp decline, a current ratio below 1 indicating liquidity strain, and mixed analyst sentiment suggest it's not an optimal time for new purchases. Investors should monitor for signs of price stabilization first.
EMR is more suitable for a long-term investment horizon. Its strategic focus on industrial automation is a multi-year theme, and short-term price volatility is high. The current technical weakness and liquidity concerns make it a challenging short-term trade. Patient investors can benefit from the company's strong cash flow and market position over time.