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KeyBanc raised its price target on Emerson (NYSE:EMR) to $150 from $125 on Thursday, while maintaining an Overweight rating on the industrial technology company’s shares. Currently trading at $126.72 with a market cap of $71.3 billion, Emerson has demonstrated strong financial health, earning a "GOOD" rating according to InvestingPro metrics.
The investment firm cited potential upside to fiscal 2025 and 2026 estimates, driven by improving orders within Discrete end markets and what it views as potentially conservative guidance for the second half of the fiscal year. The company’s impressive gross profit margin of 52.8% and revenue growth of 6.5% in the last twelve months support this optimistic outlook.
KeyBanc expressed encouragement about management’s commentary that demand has remained stable despite macroeconomic uncertainty, with little to no signs of pre-buy activity driven by tariffs. The firm also highlighted Emerson’s strong $11.5 billion project funnel, which it believes should continue to benefit from secular demand trends and reshoring activity over the longer term.
Regarding Discrete markets specifically, Emerson expects orders to exit fiscal year 2025 at a double-digit year-over-year growth rate on improving end-market demand and easing prior-year comparisons. KeyBanc suggested there could be modest upside to this outlook, noting management’s comment that even if Discrete orders remained flat from first half to second half, orders would still be up high single digits year-over-year.
The new price target implies 23.1x price-to-earnings and 17.7x enterprise value to EBITDA on KeyBanc’s fiscal 2026 estimates, compared to Emerson’s five-year averages of 22.6x price-to-earnings and 14.2x enterprise value to EBITDA. Based on current InvestingPro analysis, which considers over 30 financial metrics and market indicators, Emerson appears to be trading above its Fair Value. Subscribers can access the complete Pro Research Report, along with 12 additional ProTips and comprehensive valuation analysis.
In other recent news, Emerson Electric Company reported its second-quarter 2025 earnings, surpassing expectations with an earnings per share (EPS) of $1.48 compared to the forecasted $1.41, and revenue of $4.43 billion against an expected $4.39 billion. The company also raised its full-year EPS guidance to a range of $5.90 to $6.05, reflecting confidence in sustained growth. Citi analyst Andrew Kaplowitz raised the price target for Emerson to $133, maintaining a Buy rating, citing Emerson’s strong gross margin and potential cost synergies from its AspenTech acquisition. Meanwhile, Loop Capital reiterated its Buy rating with a price target of $155, highlighting reduced tariff impacts and Emerson’s strategic shift toward a software-centric model as positive factors. Emerson’s recent acquisition of AspenTech is expected to contribute $100 million in cost synergies by 2028, further enhancing the company’s financial outlook. The company also reported a record gross profit margin of 53.5% for the quarter, underscoring effective cost management. These developments indicate a robust financial performance and strategic positioning for Emerson in the evolving market landscape.
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