EMR
Emerson Electric Co.
$152.16
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 151.1% above fair value
You pay
$152.16
Bear
$48.48
Fair
$60.60
Bull
$72.72
Bear
$48.48
-68.1%
$4.04 × 12x P/E
Fair
$60.60
-60.2%
$4.04 × 15x P/E
Bull
$72.72
-52.2%
$4.04 × 18x P/E
Adjust Assumptions
15.0x
4.04$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
37.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (42 analysts)
$164.67
Divergence from AlphaVal
63%
Summary
Applying a 15x P/E to adjusted EPS of $4.04, the base-case value is $60.60 per share. DDM cross-check: $34.71.
Warnings
Dividend-based valuation: $34.71 (below our primary estimate by 43%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $164.67 (from 42 analysts). Our estimate is 63% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples