EMR
Emerson Electric Co.
$136.06
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 29.4% above fair value
You pay
$136.06
Bear
$84.10
Fair
$105.12
Bull
$126.14
Bear
$84.10
-38.2%
$5.33 × 12x P/E
Fair
$105.12
-22.7%
$5.33 × 15x P/E
Bull
$126.14
-7.3%
$5.33 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
25.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $163.92 from 41 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $105.12 per share.
Warnings
The company's reported profits differ from official accounting profits by 32%. Check what costs are being left out of the adjusted number.
Dividend-based valuation: $33.43 (below our primary estimate by 58%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $163.92 (from 41 analysts). Our estimate is 51% 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