Emerson Electric Co. EMR
Emerson's Q3 FY2026 results showed 7% revenue growth and 13% adjusted EPS growth with FCF margin expanding to 27.1%, and management raised full-year guidance to the upper end of the prior range, signaling that the automation portfolio repositioning is gaining traction. The stock has cooled from prior overbought conditions—RSI at 56.2 as of 2026-08-19 versus ~70 at the prior verdict—while trading at a modest 9.5% PE premium to the peer median of 31.4x, with EV/EBITDA actually 1.5% below peers.
Total debt of $13.76B as of FY2025 remains elevated versus $8.36B in FY2024, but the FCF margin recovery to 27.1% in Q3 and a mildly positive smart money score of 0.047 as of Q2 2026 suggest the deleveraging path is becoming credible.
What could go wrong
- Elevated leverage. Total debt of $13.76B as of FY2025 (ended 2025-09-30) is up sharply from $8.36B in FY2024, creating balance-sheet drag that could limit capital returns or M&A flexibility.
- Valuation premium. PE of 34.34 trades at a 9.5% premium to the peer median of 31.35, leaving limited margin of safety if growth disappoints.
- Insider selling. CEO Karsanbhai sold 9,650 shares at $161.91 on 2026-08-11 and SVP Train sold 7,329 shares at $158.99 on 2026-08-06, with no cluster buys in the recent window.
- FY2025 FCF decline. FY2025 free cash flow of $2.67B declined from $2.91B in FY2024, and FY2025 FCF margin of 14.8% was below the 16.65% posted in FY2024.
What would change my mind
Where this comes from: Seeking Alpha news article, 2026-08-06 · Technicals, as of 2026-08-19 · Peer relative data · Fundamentals, FY2025 (ended 2025-09-30). Orin's read on EMR; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All EMR filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $5.2B | 0.1% of fund |
| State Street | $4.0B | 0.1% of fund |
| Bank Of America /De/ | $2.6B | 0.2% of fund |
| Vanguard Portfolio Management | $1.9B | 0.1% of fund |
| Geode Capital Management | $1.8B | 0.1% of fund |
| Morgan Stanley | $1.7B | 0.1% of fund |
121 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 99 Form 4 filings, net $92.6M. 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
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Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 33.7× | 24.5× | 44.5× |
| EV/EBITDA | 19.1× | 16.7× | — |
| P/S | 4.64× | 3.66× | — |
| P/B | 4.2× | 3.6× | — |
Its P/E sits above all 5 of the last 5 years (+1.15σ from its own mean).
14.3%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $2.7B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$165
$135 – $186 · +7% against today's price
- 23 buy or overweight
- 16 hold
- 3 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| EMREmerson Electric Co. | $87B | 33.7× | 19.1× | 53.2% | 13.8% | 13% |
| CMICummins Inc. | $72B | 26.7× | 15.6× | 25.3% | 7.8% | 22% |
| CTASCintas Corporation | $77B | 37.4× | 26.8× | 51.0% | 17.8% | 42% |
| HWMHowmet Aerospace Inc. | $92B | 49.0× | 34.7× | 34.4% | 20.5% | 34% |
| ITWIllinois Tool Works Inc. | $79B | 24.7× | 18.9× | 44.2% | 19.4% | 102% |
| JCIJohnson Controls International plc | $88B | 25.3× | 27.0× | 36.7% | 14.3% | 27% |
| NOCNorthrop Grumman Corporation | $73B | 16.3× | 11.7× | 20.1% | 10.5% | 27% |
| PHParker-Hannifin Corporation | $122B | 33.6× | 22.5× | 37.7% | 17.0% | 25% |
| TDGTransDigm Group Incorporated | $62B | 33.5× | 18.6× | 59.6% | 21.3% | -21% |
| UPSUnited Parcel Service, Inc. | $81B | 17.8× | 9.9× | 16.6% | 5.1% | 29% |
| WMWaste Management, Inc. | $83B | 29.3× | 14.1× | 35.0% | 11.1% | 29% |
The median is of the 10 peers listed above and nothing else — check it against the column. This company trades 20.2% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $112 | $138.07 · −19% | 2026-06-10 |
| Levered DCF | $52 | $138.07 · −62% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.