Citi raises Emerson stock price target to $133, maintains Buy rating

On Monday, Citi analyst Andrew Kaplowitz updated his outlook for Emerson Electric Co. (NYSE:EMR), increasing the price target to $133.00 from the previous $127.00, while reiterating a Buy rating on the shares. According to InvestingPro data, EMR currently trades at $112.55 with a market capitalization of $63.31 billion, and analyst targets range from $104 to $168. Kaplowitz’s assessment hinges on the belief that Emerson’s earnings could prove more robust than some investors expect, due to the company’s high gross margin, which is projected to exceed 50% in fiscal year 2024, and the potential for significant cost synergies. InvestingPro data confirms this strength, showing an impressive current gross profit margin of 52.77% and highlighting the company’s 54-year streak of consecutive dividend increases.

Emerson recently announced an approximate $100 million cost synergy target by 2028 following its AspenTech buy-in, which Kaplowitz sees as a meaningful self-help opportunity. Despite concerns about a potential slowdown in Emerson’s Process segment and the pace of improvement in the company’s Test & Measurement (T&M) segment, which saw orders increase by 8% in the second fiscal quarter of 2025, the analyst suggests that the recent decrease in Emerson’s stock price has been excessive.

Kaplowitz points to Emerson’s favorable long-term secular tailwinds and the quality of the company’s earnings, which he believes have improved over time but remain underappreciated. He notes that Emerson’s relative next twelve months (NTM) price-to-earnings (P/E) ratio is approximately 0.84 times, which is below its 5-year average of around 0.97 times. In contrast, the relative NTM P/E of its peer set is about 1.07 times, aligning more closely with its 5-year average of approximately 1.09 times.

The analyst concludes that, based on these factors, Emerson remains a top pick, and thus has raised the target price to reflect the company’s potential. Emerson’s stock outlook is bolstered by both its strategic initiatives and its position in the market relative to its peers. While trading at a relatively high P/E ratio of 32.5x, InvestingPro analysis reveals 12 additional key insights about EMR’s financial health and market position. Access the complete Pro Research Report for comprehensive analysis of this prominent electrical equipment player.

In other recent news, Emerson Electric Company reported its second-quarter 2025 earnings, surpassing expectations with an EPS of $1.48, compared to the forecasted $1.41, and revenue of $4.43 billion, exceeding the expected $4.39 billion. The company also raised its full-year EPS guidance to a range of $5.90 to $6.05. Emerson’s gross profit margin improved to a record 53.5%, highlighting effective cost management. The company aims to achieve $100 million in cost synergies from the AspenTech acquisition by 2028. Analysts have noted the completion of strategic acquisitions, like AspenTech, as a positive factor for Emerson’s future growth. Challenges remain in specific markets, such as China and factory automation, which may affect future growth. However, Emerson’s strong performance in the Process and Hybrid markets continues to support its financial health. The company has also completed the integration of Test and Measurement, aiming for $200 million in run-rate cost synergies by the end of 2025.

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