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Emerson Secures Salto Grande Hydroelectric Upgrade Project

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Emerson Electric Co. (EMR - Free Report) recently clinched a deal from Salto Grande Mixed Technical Commission for boosting operational efficiency of the Salto Grande Hydroelectric Complex situated between Uruguay and Argentina.

Notably, this project marks the initial phase of the 30-year strategic investment plan for the 1,890-MW dam that involves an overall value of $960 million. However, financial terms of this deal are still kept under wraps.

Inside the Headlines

Per the five-year agreement, Emerson will be responsible for upgrading 14 hydroelectric turbine governors at the facility with the advanced Ovation automation technology. As noted, the company’s measurement and machinery instrumentation solution will help the facility in monitoring process conditions.

Also, this project will make the facility’s operations more efficient in the production of reliable energy and improve its capability to dispatch generated power in the region. In addition, the project will help in extending the facility’s operational life and improving its reliability and availability, in turn supporting the interconnected power systems of Uruguay as well as Argentina.

As noted, Emerson’s strong expertise in similar hydropower retrofit projects and solid local presence helped it in securing the contract.

Zacks Rank, Price Performance and Estimate Trend

Emerson, with a $39-billion market capitalization, currently carries a Zacks Rank #3 (Hold). The company stands to benefit from strength across medical, life science, food and beverage, as well as power end markets, along with a robust backlog level. However, overall weak demand environment and weakness in oil and gas end markets remain concerns for the company.

In the past three months, its share price has increased 5.5% compared with the industry’s growth of 10.4%.

In the past 60 days, the Zacks Consensus Estimate for the company’s fiscal 2020 (ending September 2020) earnings has trended up from $3.08 to $3.30 on nine upward estimate revisions but no downward revision. Over the same time frame, the consensus estimate for fiscal 2021 (ending September 2021) earnings has trended up from $3.19 to $3.44 on eight upward estimate revisions against one downward revision.

Stocks to Consider

Some better-ranked stocks from the same space include Enersys (ENS - Free Report) , Regal Beloit Corporation (RBC - Free Report) and II-VI Incorporated (IIVI - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Enersys delivered an earnings surprise of 5.20%, on average, in the trailing four quarters.

Regal Beloit delivered an earnings surprise of 18.91%, on average, in the trailing four quarters.

II-VI delivered an earnings surprise of 64.90%, on average, in the trailing four quarters.

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Emerson Electric Co. (EMR) - free report >>

Regal Beloit Corporation (RBC) - free report >>

IIVI Incorporated (IIVI) - free report >>

Enersys (ENS) - free report >>