Emerson Electric (EMR)
Industrials · $94.6B market cap · SEC CIK 0000032604
ahead of 51% of the S&P 500 · #36 of 79 in Industrials
Next reports on Feb 1, 2027, with analysts expecting $1.64 in earnings per share.
52-week range $122.64 to $172.00. 3% below its 52-week high and 37% above its low.
The case for EMR
- Generated $3.5B of free cash flow in FY2026, 19% of revenue.
- Pays a modest 2.4% dividend.
- Within 3% of its 52-week high: the trend is up.
The case against
- Expensive for its growth: 35.2× earnings, where 6% a year of growth plus a 2.4% dividend would justify about 21×.
- Current liabilities exceed current assets (ratio 0.94).
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Industrials companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 32 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 53 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 58 |
| Momentumhow the price has behaved lately | 78 |
| Stabilityhow violently it moves, what it owes and what it pays you | 69 |
- Each factor except momentum is half fixed thresholds, half rank among the 79 Industrials companies.
The financials
Revenue growth
Is the business growing? Slowly
| Last 12 months | +5.4% |
|---|---|
| Over 5 years | +8.0% a year |
| FY2026 revenue | $19.0B (+5%) |
Free cash flow
Is it generating real cash? Yes, plenty
| FY2026 free cash flow | $3.5B |
|---|---|
| Of revenue | 19% |
| Of profit | 131% |
Profit margins
Is profitability improving? Yes, improving
| Gross margin | 53% |
|---|---|
| Operating margin | 20% |
| Net margin, FY25 → FY26 → now | 12.6% → 14.2% → 14.1% |
Debt vs. cash
Is the balance sheet healthy? Yes, the debt is manageable
| Cash | $1.8B |
|---|---|
| Long-term debt | $7.5B |
| Net debt | $5.7B |
| Years to repay | 1.9 yrs |
Valuation
Is the stock price reasonable? No, expensive
| P/E | 35.2× |
|---|---|
| Fair P/E for its growth | 21× |
| P/FCF | 26.7× |
| Forward P/E | 22.7× |
| EV / EBITDA | 22.4× |
At 35.2× earnings it trades well above the 21× that 6% a year of growth plus a 2.4% dividend would justify. At 26.7× free cash flow it trades above that same mark.
The financials, five years deep
Pulled from Emerson Electric's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2026 | FY2025 | FY2024 | FY2023 | FY2022 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $19.0B | $18.0B | $17.5B | $15.2B | $13.8B |
| Change on the year | +5% | +3% | +15% | +10% | — |
| Free cash flow | |||||
| Free cash flow | $3.5B | $2.7B | $2.9B | $274M | $2.6B |
| Of revenue | 19% | 15% | 17% | 2% | 19% |
| Profit margins | |||||
| Gross margin | 53.4% | 52.8% | 50.8% | 49.0% | 45.7% |
| Net margin | 14.2% | 12.6% | 11.3% | 87.2% | 23.4% |
| Debt vs. cash | |||||
| Cash | $1.8B | $1.5B | $3.6B | $8.1B | $1.8B |
| Long-term debt | $7.5B | $8.3B | $7.2B | $7.6B | $8.3B |
| Net cash (debt) | −$5.7B | −$6.8B | −$3.6B | $441M | −$6.5B |
What Emerson Electric says it does
Emerson Electric Co. ("Emerson", "we", "us", "our" or the "Company”) is a global automation company that provides innovative solutions for customers in a wide range of end markets around the world. Through its leading automation portfolio, Emerson helps process, hybrid and discrete manufacturers optimize operations, protect personnel, reduce emissions and achieve their sustainability goals. Sales by geographic destination in 2026 were: the Americas, 52 percent; Asia, Middle East & Africa, 30 percent (China, 9 percent); and Europe, 18 percent . Emerson was incorporated in Missouri in 1890 and has evolved through internal growth and strategic acquisitions. Management has a well-established set of operating mechanisms to manage its business performance and set strategy. The Company also has processes undertaken by management with oversight from the Board of Directors to specifically focus on risks in areas such as cybersecurity,…
Risk factors EMR lists in its 10-K
- We Operate in Businesses That Are Subject to Competitive Pressures That Could Affect Prices or Demand for Our Products
- Our Operating Results Depend in Part on Continued
- Successful Research, Development and Marketing of New and/or Improved Products and Services, and There Can Be No Assurance That We Will Continue to Successfully Introduce New Products and Services
- If We Are Unable to Defend or Protect Our Intellectual Property Rights, the Company's Competitive Position Could Be Adversely Affected
- We Use a Variety of Raw Materials and Components in Our Businesses, and Significant Shortages or Price Increases Could Increase Our Operating Costs and Adversely Impact the Competitive Positions of Our P
- Access to Funding Through the Capital Markets is Essential to the Execution of Our Business Plan, and if We Are Unable to Maintain Such Access We Could Experience a Material Adverse Effect on Our Business and Financial Results
- Our Business Success Depends on the Ability to Attract, Develop and Retain Key Personnel
- Security and/or Data Privacy Breaches, or Disruptions of Our Information Technology Systems Could Adversely Affect Our Business
- Our Substantial Sales Both in the U.S. and Abroad Subject Us to Economic Risk as Our Results of Operations May Be Adversely Affected by Changes in Government Regulations and Policies and Currency Fluctuations
- Recessions, Adverse Market Conditions or Downturns in End Markets We Serve May Negatively Affect Our Operations
- Changes in Tax Rates, Laws or Regulations and the Resolution of Tax Disputes Could Adversely Impact Our Financial Results
- Our Reputation, Ability To Do Business and Results of Operations Could Be Impaired By Improper Conduct By Any of Our Employees, Agents or Business Partners
- We Are Subject to Litigation and Environmental Regulations That Could Adversely Impact Our Operating Results
- Interest and Expectations with Respect to Sustainability Matters by Our Various Stakeholders Could Adversely Affect Our Business and Operating Results