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Here's Why Emerson Electric (EMR) Fell More Than Broader Market

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Emerson Electric (EMR - Free Report) closed the most recent trading day at $131.46, moving -1.04% from the previous trading session. This change lagged the S&P 500's 0.55% loss on the day. Meanwhile, the Dow experienced a drop of 0.19%, and the technology-dominated Nasdaq saw a decrease of 0.95%.

The stock of maker of process controls systems, valves and analytical instruments has risen by 0.35% in the past month, leading the Industrial Products sector's loss of 0.07% and undershooting the S&P 500's gain of 3.64%.

Investors will be eagerly watching for the performance of Emerson Electric in its upcoming earnings disclosure. On that day, Emerson Electric is projected to report earnings of $1.62 per share, which would represent year-over-year growth of 9.46%. At the same time, our most recent consensus estimate is projecting a revenue of $4.9 billion, reflecting a 6.05% rise from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $6 per share and revenue of $18.06 billion, indicating changes of +9.29% and +3.27%, respectively, compared to the previous year.

Investors should also note any recent changes to analyst estimates for Emerson Electric. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.07% higher. Emerson Electric presently features a Zacks Rank of #3 (Hold).

In the context of valuation, Emerson Electric is at present trading with a Forward P/E ratio of 22.13. This represents a discount compared to its industry average Forward P/E of 23.08.

One should further note that EMR currently holds a PEG ratio of 2.52. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Manufacturing - Electronics industry had an average PEG ratio of 1.83.

The Manufacturing - Electronics industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 70, which puts it in the top 29% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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