Emerson Electric Co Dossier - Source-backed chat

Emerson Electric Co

EMRNYSE

SectorIndustrials

IndustryElectrical Components & Equipment

Beta (adjusted)1.16

Intrinsic Value $100.29median of 6 methods · middle span $92-$125based on filings through 30 Jun 2026

Market Price $158.57Price as of 1 Oct 2026

OvervaluedIntrinsic value is 37% below the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

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Market Cap $88.5B

Enterprise Value $94.4B

Shares Outstanding 562.3M diluted

Moat Rating Narrow

Next Earnings Date4 Nov 2026

Last ex-dividend14 Aug 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Emerson enters the fiscal-year close with strong demand and execution: third-quarter underlying orders rose 7%, underlying sales rose 6%, adjusted segment EBITA margin reached 28.5%, and adjusted EPS increased 13%. The portfolio offers attractive exposure to power, LNG, life sciences, semiconductors, aerospace and defense, while the $9.6 billion backlog provides near-term visibility. However, the August 28 closing price of $155.18 already discounts substantial progress toward management's FY2028 targets. The resulting base-case price appreciation is modest, while acquisition integration, elevated leverage, regional weakness and geopolitical disruption remain material counterweights.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets27 analysts · as of 18 Aug 2026

Low · most bearish analyst$104.00

Mean target$171.07

High · most bullish analyst$205.00

Street targets sit above today's price; our intrinsic value sits below it. Different horizons, different questions.

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 2 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

$104.0020%

Twelve-month bear case: industrial demand weakens, backlog declines below $9 billion, underlying orders turn non-positive, and adjusted segment EBITA margin falls below 27%. Higher interest expense, integration complexity, restructuring and weakness in Europe or China reduce confidence in the FY2028 framework and compress the valuation.

Base CaseCentral scenario

$171.0755%

Matches the consensus mean

Twelve-month base case: Emerson delivers approximately $6.55 of FY2026 adjusted EPS, maintains positive underlying orders, and advances toward the FY2028 targets of $21 billion in sales, 30% adjusted segment EBITA margin and $8.00 adjusted EPS.

Bull CaseUpside scenario

$205.0025%

Twelve-month bull case: orders remain at high-single-digit growth, Test & Measurement and industrial software sustain above-company growth, backlog converts on schedule, and margin expansion makes the FY2028 targets appear conservative. Successful AspenTech and NI integration, AI-enabled product adoption and continued repurchases support a higher quality-growth valuation.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Third-quarter execution was strong across demand, sales, profitability and cash generation: underlying orders increased 7%, net sales increased 7%, adjusted segment EBITA margin expanded to 28.5%, adjusted EPS increased 13%, and free cash flow increased 36%.
Software & Systems grew 11% in the third quarter, including 23% growth in Test & Measurement, while the $9.6 billion contract backlog provides revenue visibility and approximately 75% is expected to convert within twelve months.
Management's FY2028 framework targets $21 billion of sales, 30% adjusted segment EBITA margin, $8.00 adjusted EPS, $12 billion of cumulative free cash flow and $10 billion of shareholder returns.

Key Investment Risks

Leverage remains elevated following the AspenTech transaction: net debt to net capital was 34.9% and twelve-month interest coverage was 8.2 times at June 30, 2026, versus 9.6 times one year earlier.
At June 30, 2026, Emerson carried $18.1 billion of goodwill and $8.7 billion of other intangible assets, increasing exposure to integration underperformance, amortization and potential impairment if acquired businesses miss expectations.
Demand is geographically uneven and exposed to geopolitical disruption: third-quarter Europe sales declined 1%, China declined 3%, and management identified the Middle East conflict as an ongoing uncertainty.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.