EMR
Emerson Electric Co.
Industrial/Transportation, TMT
02/09/2022
Presented
| Date | 02/02/2022 |
| Price | $97.56 |
| Market Cap | $58.04B |
| Ent Value | $60.22B |
| P/E Ratio | 21.27x |
| Book Value | $17.25 |
| Div Yield | 2.08% |
| Shares O/S | 594.90M |
| Ave Daily Vol | 3,060,390 |
| Short Int | 1.17% |
Current
| Price | $109.25 |
| Market Cap | $62.57B |
| Emerson Electric Co. is a global technology and engineering company, which provides innovative solutions for customers in industrial, commercial and residential markets. It operates through the following business segments: Automation Solutions, Climate Technologies, and Tools and Home Products. The Automation Solutions segment offers products, integrated solutions, software and services which enable process, hybrid and discrete manufacturers to maximize production, protect personnel and the environment, reduce project costs, and optimize their energy efficiency and operating costs. The Climate Technologies segment provides products and services for many areas of the climate control industry, including residential heating and cooling, commercial air conditioning, and commercial and industrial refrigeration. The Tools and Home Products segment provides tools for professionals and homeowners and appliance solutions. The company was founded by Charles Meston and Alexander Meston on September 24, 1890 and is headquartered in St. Louis, MO. |
Publicly traded companies mentioned herein: Aspen Technology Inc (AZPN), Emerson Electric Co (EMR), Lennox International Inc (LII), Rockwell Automation Inc (ROK), Trane Technologies PLC (TT)
Highlights
The presenter is long shares of Emerson Electric Co (EMR), which reported a strong Q1’22 on February 2nd. EMR beat on earnings, was in line with consensus on revenues, and raised guidance for the year in both businesses. For its Automation Solutions segment (65% business mix), management raised organic growth guidance for FY2022 from 6% – 8% to 7% – 9% and they raised guidance for the Commercial & Residential Solutions segment from 6% – 9% to 9% – 11%. Even with the positive revision, the presenter views this as one of the few industrial stocks with a clear path to beat-and-raises throughout the year. Management recently guided to FY2022 EPS of $4.90 – $5.05, but his base case is targeting $5.50 – $6. Applying a market multiple of 20x on that $5.50 EPS yields a price target of $110, implying 13% upside to the current $97 share price, which he considers good return for a large cap, low beta, relatively uncrowded name.
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