Emerson Electric Co.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Emerson's operational turnaround is real — Q3 FY2026 revenue grew 7.0% YoY (quarter ended 30 Jun), operating margin reached 19.6% in FY2025, and the company has beaten EPS estimates in eight consecutive quarters — but the stock at $162.46 trades at 35.4x trailing earnings, a 5.8% premium to the peer median of 33.5x, after rallying above both the 50-day ($156.11) and 200-day ($145.45) moving averages.
Total debt of $13.76B as of FY2025 (ended 30 Sep 2025), up sharply from $8.36B the prior year, combined with FCF margin compression to 14.8% from 16.7% and persistent insider selling (net -$13.1M over 24 months, including CEO sales at ~$162) tempers enthusiasm despite the constructive technical trend and attractive 21.5% EV/EBITDA discount to peers. Hold the quality automation compounder; the improving fundamentals are offset by elevated leverage and a full valuation.
What could go wrong
- Debt burden. Total debt of $13.76B as of FY2025 (ended 30 Sep 2025) is up from $8.36B in FY2024, increasing interest expense and limiting financial flexibility if end markets soften.
- Insider selling. Over the trailing 24 months, insiders disposed of a net 97,500 shares worth $13.1M with zero open-market acquisitions; the CEO sold shares at ~$162 in August 2026.
- Valuation compression. At 35.4x trailing earnings versus a peer median of 33.5x, any deceleration in revenue growth or margin expansion could trigger a de-rating, particularly with RSI at 61.9 suggesting limited near-term upside momentum.
- FCF deterioration. FCF margin compressed to 14.8% in FY2025 from 16.7% in FY2024, and free cash flow of $2.67B declined from $2.91B despite higher revenue, raising questions about cash conversion sustainability.
What would change my mind
Where this comes from: results, quarter to 30 Jun · FY25 fundamentals · FY24 and FY25 fundamentals · peer comparison, 12 Oct. Orin's read on EMR; not advice.
How has the share price moved?
Up 23.7% over twelve months, from $134.46 on 27 Oct 2025 to $166.27 at the Tue 27 Oct 2026 close. That is its highest close in that time.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 9.9M, on 12 Feb 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All EMR filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $6.2B | 0.1% |
| Vanguard Capital Management | $5.2B | 0.1% |
| State Street | $4.0B | 0.1% |
| Bank of America | $2.6B | 0.2% |
| Vanguard Portfolio Management | $1.9B | 0.1% |
| Geode Capital Management | $1.8B | 0.1% |
| Morgan Stanley | $1.7B | 0.1% |
| JPMorgan Chase | $1.5B | 0.1% |
| Wells Fargo | $1.4B | 0.2% |
| T. Rowe Price Associates | $1.3B | 0.1% |
123 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 99 Form 4 filings; open-market trades net −$13.1M. Of the 50 on hand, 0 were open-market purchases and 9 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about EMR
Orin answers questions about EMR from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 33.9× its last 12 months of profit (Thu 5 Nov close) — higher than in all 5 of its last 5 fiscal years (middle 25.8×); the typical Industrials company on the NYSE is at 33.7×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 33.9×above usual | 25.8× | 33.7× |
| P/S | 4.78×above usual | 3.66× | — |
| EV/EBITDA | 18.9×above usual | 16.7× | — |
| P/B | 4.4×above usual | 3.6× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $167 (from $135 to $186) — 1% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$167
$135 – $186 · +1% against the last close
- 9 buy or overweight
- 9 hold
- 1 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 33.9× its last 12 months of profit; the middle P/E of the 6 companies it is compared to that made a profit is 31.3×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| EMREmerson Electric Co. | $91B | 33.9× | 18.9× | 53.4% | 14.1% | 13% |
| DOVDover Corporation | $28B | 23.9× | 15.2× | 39.7% | 13.6% | 15% |
| ETNEaton Corporation plc | $149B | 39.0× | 26.3× | 35.9% | 12.8% | 20% |
| IEXIDEX Corporation | $17B | 32.3× | 19.3× | 44.9% | 14.6% | 13% |
| JCIJohnson Controls International plc | $94B | 33.2× | 25.0× | 37.1% | 11.1% | 21% |
| PHParker-Hannifin Corporation | $113B | 30.2× | 21.2× | 37.7% | 16.6% | 25% |
| ROKRockwell Automation, Inc. | $42B | 30.4× | 21.2× | 50.0% | 15.7% | 39% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 33.9× its last 12 months of profit (Thu 5 Nov close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now33.9×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Industrials companies on the NYSE were priced at a typical 33.7× their yearly profit (Tue 27 Oct close).
- Now33.7×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $101 a share — 39% below the $165.09 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $101 | 39% below $165.09 |
| Levered | $46 | 72% below $165.09 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.