EMR
Emerson Electric Co.
$136.42
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 30.7% above fair value
You pay
$136.42
Bear
$83.47
Fair
$104.34
Bull
$125.20
Bear
$83.47
-38.8%
$5.33 × 12x P/E
Fair
$104.34
-23.5%
$5.33 × 15x P/E
Bull
$125.20
-8.2%
$5.33 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
25.6x
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 $161.31 from 41 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $104.34 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 $161.31 (from 41 analysts). Our estimate is 50% 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