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Emerson Electric (EMR) Soars to 52-Week High, Time to Cash Out?
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Shares of Emerson Electric (EMR - Free Report) have been strong performers lately, with the stock up 5.4% over the past month. The stock hit a new 52-week high of $99.09 in the previous session. Emerson Electric has gained 21% since the start of the year compared to the 11.5% move for the Zacks Industrial Products sector and the 18.7% return for the Zacks Manufacturing - Electronics industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 5, 2021, Emerson Electric reported EPS of $0.97 versus consensus estimate of $0.9 while it beat the consensus revenue estimate by 1.69%.
For the current fiscal year, Emerson Electric is expected to post earnings of $3.94 per share on $18.17 billion in revenues. This represents a 13.87% change in EPS on an 8.26% change in revenues. For the next fiscal year, the company is expected to earn $4.36 per share on $19.23 billion in revenues. This represents a year-over-year change of 10.55% and 5.81%, respectively.
Valuation Metrics
Emerson Electric may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Emerson Electric has a Value Score of C. The stock's Growth and Momentum Scores are C and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 24.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 19.7X versus its peer group's average of 22.9X. Additionally, the stock has a PEG ratio of 2.43. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Emerson Electric currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Emerson Electric fits the bill. Thus, it seems as though Emerson Electric shares could still be poised for more gains ahead.
How Does Emerson Electric Stack Up to the Competition?
Shares of Emerson Electric have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including A. O. Smith (AOS - Free Report) , Regal Beloit (RBC - Free Report) , and Eaton Corporation, (ETN - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 26% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Emerson Electric, even beyond its own solid fundamental situation.
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Emerson Electric (EMR) Soars to 52-Week High, Time to Cash Out?
Shares of Emerson Electric (EMR - Free Report) have been strong performers lately, with the stock up 5.4% over the past month. The stock hit a new 52-week high of $99.09 in the previous session. Emerson Electric has gained 21% since the start of the year compared to the 11.5% move for the Zacks Industrial Products sector and the 18.7% return for the Zacks Manufacturing - Electronics industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 5, 2021, Emerson Electric reported EPS of $0.97 versus consensus estimate of $0.9 while it beat the consensus revenue estimate by 1.69%.
For the current fiscal year, Emerson Electric is expected to post earnings of $3.94 per share on $18.17 billion in revenues. This represents a 13.87% change in EPS on an 8.26% change in revenues. For the next fiscal year, the company is expected to earn $4.36 per share on $19.23 billion in revenues. This represents a year-over-year change of 10.55% and 5.81%, respectively.
Valuation Metrics
Emerson Electric may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Emerson Electric has a Value Score of C. The stock's Growth and Momentum Scores are C and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 24.7X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 19.7X versus its peer group's average of 22.9X. Additionally, the stock has a PEG ratio of 2.43. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Emerson Electric currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Emerson Electric fits the bill. Thus, it seems as though Emerson Electric shares could still be poised for more gains ahead.
How Does Emerson Electric Stack Up to the Competition?
Shares of Emerson Electric have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including A. O. Smith (AOS - Free Report) , Regal Beloit (RBC - Free Report) , and Eaton Corporation, (ETN - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 26% of all the industries we have in our universe, so it looks like there are some nice tailwinds for Emerson Electric, even beyond its own solid fundamental situation.