Emerson Electric (EMR)
NYSEIndustrialsIndustrial - MachinerySnapshot 2026-09-04
$152.82+1.74%
Close 2026-09-04 · 1-day change
NYSEIndustrialsIndustrial - MachinerySnapshot 2026-09-04
Warn: Primary pillar under pressure — Achieve free cash flow of $3.5B-$3.6B: FCF guidance $3.6B vs $3.5B target.
Emerson grows sales about 3-4% yearly with steady profit. It targets $3.5B to $3.6B free cash flow in 2026. The company plans to return $2.2B to shareholders through buybacks and dividends. Profit per share is guided near $4.8 for 2026.
Sales growth may slow below 3% due to sector headwinds. Free cash flow progress is slow, with only $694M in Q2. The company’s EPS guidance is soft, risking a miss. Rising debt from recent credit deals could pressure capital returns.
The market prices about 7% revenue growth and values shares near $143, just below our fair value. Our fair value is 5% below the Street median, reflecting cautious optimism. We see risk in free cash flow delivery and EPS consistency.
Breaks if: Shareholder returns fall below $2.2B in 2026
Emerson plans to return approximately $2.2 billion to shareholders through share repurchases and dividends in 2026.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a focus on stability and consistent cash flow generation. The current thesis is intact, supported by strong recent financial results and ongoing shareholder returns, despite some sector headwinds.
The market appears to have priced in a neutral valuation compared to peers, with a slight expectations gap indicating modest growth assumptions. The current valuation suggests that while EMR is seen as cheap relative to its peers, there is a recognition of potential fragility in execution.
Management is focused on completing the AspenTech acquisition, which is crucial for transforming its portfolio. Recent financial performance has been strong, but there is a mixed outlook on free cash flow generation, which could impact future results.
The thesis hinges on the performance of sector bellwethers like GEV, PH, and TT, which could influence EMR's momentum. Additionally, any changes in guidance during upcoming calls could significantly affect market sentiment and expectations.
The most important moves since the prior daily snapshot.
Yes, our read has strengthened. Emerson Electric maintained its EPS guidance of $4.79-$4.89 for 2026. The company also aims to achieve $3.5B-$3.6B in free cash flow for 2026. These factors support a positive outlook for the company.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Breaks if: EPS guidance falls below $4.79 for FY26
Breaks if: Free cash flow falls below $3.5B in FY26
Maintain strong free cash flow generation target of approximately $3.5 to $3.6 billion for fiscal year 2026.
Stated as a priority in 4 of last 4 quarters from 2025-Q3 through 2026-Q2. Management has maintained free cash flow guidance around $3.5 to $3.6 billion for 2026, supported by strong operational cash flow and capital expenditure discipline. The trajectory is delivering with consistent cash flow generation near guidance.
“Free Cash Flow ~$3.6B”
“Free Cash Flow $3.5B - $3.6B”
“Free Cash Flow $3.5B - $3.6B”
“Expectations for operating cash flow and free cash flow increase to ~$3.6B and ~$3.2B, respectively.”
Breaks if: YoY revenue growth falls below 3% in FY26
Overall, EMR is navigating a challenging sector backdrop while maintaining strong fundamentals. Not investment advice.