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Investing.com - Mizuho has reiterated an Outperform rating and $155.00 price target on Emerson (NYSE:EMR) following the company’s Investor Day in New York City. The target represents a 25% upside from the current price of $123.72, though InvestingPro data suggests the stock is currently trading near its Fair Value.
Emerson unveiled its 2028 targets, projecting earnings per share of $8 based on 4-7% growth and 40% incremental margins. The plan includes $6 billion in share repurchases and favorable tax conditions, while allocating only $1 billion for mergers and acquisitions. With current diluted EPS at $4.03, this ambitious target would represent nearly 100% growth over the period.
The industrial technology company expects its software segment, currently representing 14% of sales, to achieve low double-digit growth, with the remainder growing at mid-single digits. Emerson aims to shift its portfolio toward two-thirds software from its historically hardware-dominant structure. This strategic shift comes as the company maintains impressive gross profit margins of 52.84%.
Mizuho views Emerson’s target of 10% EPS growth by 2028 as potentially beatable, supported by disciplined pricing strategies (+2%) and strong tailwinds in electrification, LNG, and sovereignty hardening. The company has also begun footprint rationalization efforts.
The research firm highlighted Emerson’s 18-20% free cash flow margin as significantly above peers and underappreciated, naming the stock as a "Top Pick" heading into 2026.
In other recent news, Emerson Electric reported its fourth-quarter 2025 earnings, with earnings per share of $1.62, aligning with analyst expectations. However, the company’s revenue of $4.86 billion fell short of the anticipated $4.9 billion. During its 2025 Investor Conference, Emerson announced plans to return $10 billion to shareholders by 2028 through share repurchases and increased dividends. The company also set new financial targets for 2028, including projected net sales of $21 billion and an adjusted earnings per share of $8.00. Emerson has updated its segment reporting structure, effective in fiscal 2026, to include five segments: Control Systems & Software, Test & Measurement, Sensors, Final Control, and Safety & Productivity. Additionally, Emerson’s board approved performance-based stock option awards for its top executives, with exercise prices set at various premiums. Wolfe Research recently raised its price target for Emerson to $168, maintaining an Outperform rating, following the company’s investor event.
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