BofA update shows where active managers are putting money
Investing.com - KeyBanc raised its price target on Emerson (NYSE:EMR) to $155.00 from $150.00 on Tuesday, while maintaining an Overweight rating on the industrial automation company. The stock, currently trading at $133.47 and near its 52-week high of $134.85, has demonstrated strong momentum with a 25.61% return over the past year. According to InvestingPro analysis, the stock is currently trading above its Fair Value.
The price target increase follows KeyBanc’s meeting with Emerson’s CFO, Mike Baughman, and the Investor Relations team at the company’s new corporate headquarters in Clayton, Missouri. KeyBanc views Emerson as "an underappreciated story" with stronger margins and resilient growth opportunities following its transformation into a pure-play industrial automation conglomerate. The company’s impressive gross profit margin of 52.77% and substantial market capitalization of $74.95 billion underscore its strong market position. InvestingPro subscribers can access 12+ additional key metrics and insights about Emerson’s financial health.
KeyBanc gained further insight into Emerson’s long-term software strategy after the company’s recent announcement of Project Beyond. The firm noted that Emerson’s eventual shift toward being two-thirds software mix, compared to one-third today, is likely a decade-long journey.
The investment firm believes Emerson’s recent portfolio shifts support better mix, and remains constructive about its growth potential of 4-7% organic growth through the cycle. KeyBanc cited secular trends supporting global energy security, continued labor tightness, and evolving AI solutions for automation as positioning Emerson well for long-term growth.
KeyBanc also indicated that management’s expected order trends for discrete markets exiting the year seem realistic, with potential for better operating leverage into fiscal year 2026 should market inflection accelerate.
In other recent news, Emerson Electric Company reported its second-quarter 2025 earnings, surpassing expectations with an earnings per share (EPS) of $1.48, above the forecasted $1.41, and revenue of $4.43 billion, exceeding the anticipated $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. KeyBanc has raised its price target for Emerson to $150, maintaining an Overweight rating, citing potential upside in fiscal 2025 and 2026 estimates due to stable demand and a strong project funnel valued at $11.5 billion. Loop Capital also maintained a Buy rating with a price target of $155, highlighting improved margins and reduced tariff-related headwinds due to easing trade tensions between the U.S. and China. Citi raised its price target to $133, maintaining a Buy rating, based on Emerson’s high gross margins and potential cost synergies from its AspenTech acquisition. Emerson’s strategic initiatives and strong financial performance have led to positive outlooks from multiple analyst firms, reinforcing investor confidence.
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