EMERSON ELECTRIC CO (EMR)

Price—Loading quote

AI: Overvalued

Price checkThe price assumes strong growth continues, leaving little room for ordinary setbacks.

At the latest verifiable but very thin premarket quote of $162.85, Emerson is worth about $90.8 billion using 557.8 million June shares. Against management’s approximately $6.55 adjusted 2026 earnings per share—profit after excluding selected acquisition, restructuring, tax and amortization items—the price is 24.9 times adjusted earnings. Trailing free cash flow, cash left after operations and capital spending, was about $3.46 billion, implying a 3.8% yield. Even management’s $8 target for 2028 gives $160 at 20 times earnings. This supports Overvalued.

Big pictureSales and cash are growing, but acquisition debt weakens the downside cushion.

Trailing twelve-month revenue was $18.64 billion, about 4.8% above the comparable prior period, while third-quarter net income grew 23% and free cash flow grew 36%. Annual operating cash was roughly $2.9-$3.6 billion in five of six fiscal years through 2025; the exception was 2023 at $0.64 billion. However, funding the full AspenTech purchase lifted leverage. June net debt was $10.93 billion, or 3.2 times trailing free cash flow, and current liabilities exceeded current assets by $1.12 billion. That leaves less protection if major industrial projects slow.

Business strengthHigh margins and recurring software demand support cash, while buybacks offset employee share awards.

Third-quarter adjusted segment margin—operating profitability before restructuring and acquired-intangible charges—rose 1.4 percentage points to 28.5%. Orders excluding AspenTech grew 7%, led by Software & Systems. During the latest four quarters, $3.46 billion of free cash flow covered $1.23 billion of dividends plus $0.92 billion of buybacks about 1.6 times. Shares fell from 570.2 million in September 2024 to 557.8 million in June 2026 despite $246 million of stock compensation. Buybacks therefore more than offset employee awards, although expensive repurchases offer less benefit than reducing net debt.

What could change the storyFaster software-led growth could justify the premium; missed targets would expose valuation risk.

The strongest bull case is delivery of management’s 2028 targets: $21 billion of sales, $8 adjusted earnings per share, $12 billion of cumulative free cash flow and $10 billion of shareholder returns. Yet the current quote already equals 20.4 times that earnings target. Value would improve if earnings exceed $8, cash flow approaches 20% of sales and debt falls materially. The bear case strengthens if underlying growth stays below 4% because of Middle East closures, China weakness or delayed energy and semiconductor projects. At 18 times $8, the implied price is $144.

$162.85 price considered

AI: News

Third-quarter accelerationOrders, profit, and cash all strengthened, prompting management to raise its full-year outlook.

On August 4, 2026, Emerson reported third-quarter sales of $4.87 billion, up 7%, while orders excluding AspenTech also grew 7%. Adjusted earnings rose 13% to $1.71 per share, and free cash flow increased 36% to $1.32 billion. Management raised expected annual sales growth from about 4.5% to 5% and set adjusted earnings near $6.55 per share. The stock closed 2.3% higher on August 5, the first full session afterward; the timing is consistent with a favorable response but does not prove sole causation.

Middle East sales setbackConflict-related delays held back sales, showing why project timing can quickly change results.

On May 5, 2026, Emerson reported second-quarter sales of $4.56 billion, up 3% but below the $4.60 billion analyst estimate reported by Reuters. Underlying sales grew only 0.5%, and free cash flow declined 6% to $694 million, although adjusted earnings of $1.54 per share narrowly exceeded expectations. Reuters reported an approximately 2% after-hours decline. Emerson attributed part of the shortfall to Middle East disruption. Orders still grew 5%, suggesting delays rather than lost demand, but repeated interruptions could shift revenue and cash generation.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009	2008	2007
Revenue	$18.02B	$17.49B	$15.16B	$13.80B	$12.93B	$16.79B	$18.37B	$17.41B	$15.26B	$14.52B	$16.25B	$17.73B	$24.67B	$24.41B	$24.22B	$21.04B	$20.10B	$23.75B	$22.13B
Gross profit	$9.52B	$8.88B	$7.43B	$6.31B	$7.56B	$7.01B	$7.82B	$7.43B	$6.40B	$6.26B	$7.01B	$10.16B	$9.95B	$9.77B	$9.56B	$8.33B	$7.56B	—	—
Research & development	$771.0M	$781.0M	$523.0M	$385.0M	$347.0M	$439.0M	$454.0M	$436.0M	$340.0M	$320.0M	$336.0M	$356.0M	$576.0M	$547.0M	$555.0M	$473.0M	$460.0M	$458.0M	—
Net income	$2.29B	$1.97B	$13.22B	$3.23B	$2.30B	$1.97B	$2.31B	$2.20B	$1.52B	$1.64B	$2.71B	$2.15B	$2.00B	$1.97B	$2.48B	$2.16B	$1.72B	$2.41B	$2.14B
Basic EPSper diluted share	$4.06	$3.44	$23.00	$5.44	$3.85	$3.26	$3.74	$3.48	$2.35	$2.53	$4.01	$3.05	$2.78	$2.68	$3.29	$2.87	$2.29	$3.09	$2.69
Diluted EPSper diluted share	$4.04	$3.43	$22.88	$5.41	$3.82	$3.24	$3.71	$3.46	$2.35	$2.52	$3.99	$3.03	$2.76	$2.67	$3.27	$2.84	$2.27	$3.06	$2.66

Review source filings at SEC.gov ↗

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)14$20.44M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 1, 2026Form 4	Krishnan Ram R.Executive Vice Pres & COO	SellCommon Stock · indirect	11.5K	$141.22	$1.62M	159.6K
Mar 10, 2026Form 4	Karsanbhai Surendralal LancaPresident & CEO	SellCommon Stock · indirect	5.7K	$142.32	$811.2K	281.4K
Feb 10, 2026Form 4	LEVATICH MATTHEW SDirector	SellCommon Stock	1.5K	$162.16	$239.3K	24.3K
Feb 9, 2026Form 4	Piazza Nicholas J.Senior VP & CPO	SellCommon Stock	6.7K	$159.07	$1.07M	31.7K
Feb 5, 2026Form 4	BLINN MARK ADirector	SellCommon Stock	1.5K	$152.79	$225.5K	7.6K

Review ownership filings at SEC.gov ↗

EMERSON ELECTRIC CO (EMR)

Financial charts

Financial statements

Insider buys & sells