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Emerson Electric (EMR) Registers a Bigger Fall Than the Market: Important Facts to Note

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Emerson Electric (EMR - Free Report) closed at $130.11 in the latest trading session, marking a -1.37% move from the prior day. The stock's change was less than the S&P 500's daily loss of 0.5%. On the other hand, the Dow registered a loss of 0.38%, and the technology-centric Nasdaq decreased by 0.5%.

The maker of process controls systems, valves and analytical instruments's shares have seen a decrease of 1.15% over the last month, surpassing the Industrial Products sector's loss of 1.21% and falling behind the S&P 500's gain of 2.74%.

Analysts and investors alike will be keeping a close eye on 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%. Our most recent consensus estimate is calling for quarterly revenue of $4.9 billion, up 6.05% from the year-ago period.

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 take note of any recent adjustments to analyst estimates for Emerson Electric. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.07% increase. Emerson Electric currently has a Zacks Rank of #3 (Hold).

Looking at valuation, Emerson Electric is presently trading at a Forward P/E ratio of 21.98. This expresses a discount compared to the average Forward P/E of 22.65 of its industry.

One should further note that EMR currently holds a PEG ratio of 2.5. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Manufacturing - Electronics stocks are, on average, holding a PEG ratio of 1.87 based on yesterday's closing prices.

The Manufacturing - Electronics industry is part of the Industrial Products sector. This industry, currently bearing a Zacks Industry Rank of 73, finds itself in the top 30% echelons of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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