Value
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.0 |
| P/S | 7.4 |
| EV/EBITDA | 2.7 |
| Fwd P/E | 6.6 |
| PEG | 4.6 |
| Analyst target | 6.0 |
- ▸Forward P/E: 19.4x
- ▸PEG: 1.94
EMR · Why this verdict
Why Emerson Electric (EMR) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow runs at 134% of net income and the Piotroski F-Score stands at 8 out of 9, signaling both exceptional earnings-to-cash conversion and broad financial health across profitability, solvency, and efficiency measures — a foundation that justifies a premium multiple. Quality breakdown | Over 12 months, free cash flow conversion stays above 100% of net income, confirming the cash generation quality is structural rather than transient. | →Stable |
| CounterFree cash flow exceeding net income can reflect favorable working capital timing or deferred maintenance capex; if those tailwinds normalize, conversion could revert to a less impressive level. | ||
Three beats and one in-line result across the last four quarters — with no misses — reflects a pattern of consistently meeting or exceeding expectations across a variety of demand environments, including a 3.39% beat in the most recent prior quarter. Earnings | The company delivers at least 3 beats out of the next 4 quarters, keeping the cumulative miss count at zero. | →Stable |
| CounterThe most recent beat was a narrow +0.44% surprise, suggesting estimates have been calibrated tightly to actual performance and the historical under-promise buffer may be narrowing. | ||
At just 0.8% below the analyst price target, the stock has substantially realized the upside embedded in consensus estimates, making a fresh position from current levels a low-expected-value setup even with a risk/reward ratio of 2.91-to-1 calculated from a lower entry point. Price targets | A pullback to the entry support level near $130 or an analyst target revision above $165 restores meaningful upside for new buyers. | →Stable |
| CounterPositive news sentiment and strong technical momentum have driven the stock to target, and the same catalysts could prompt upward analyst target revisions — supporting existing holders without requiring a price correction. | ||
A golden cross, position above all major moving averages, and rising on-balance volume confirm that price momentum has been sustained by genuine accumulation — a technical backdrop that has historically supported continuation in high-quality industrial names. Momentum breakdown | Price remains above the 200-day moving average over the next 12 months while momentum indicators stay positive, confirming the trend holds. | →Stable |
| CounterA recent officer departure or appointment disclosed in regulatory filings introduces leadership uncertainty that could weigh on sentiment and interrupt the established technical trend. | ||
Free cash flow runs at 134% of net income and the Piotroski F-Score stands at 8 out of 9, signaling both exceptional earnings-to-cash conversion and broad financial health across profitability, solvency, and efficiency measures — a foundation that justifies a premium multiple.
→StableQuality breakdown
- Expectation
- Over 12 months, free cash flow conversion stays above 100% of net income, confirming the cash generation quality is structural rather than transient.
CounterFree cash flow exceeding net income can reflect favorable working capital timing or deferred maintenance capex; if those tailwinds normalize, conversion could revert to a less impressive level.
Three beats and one in-line result across the last four quarters — with no misses — reflects a pattern of consistently meeting or exceeding expectations across a variety of demand environments, including a 3.39% beat in the most recent prior quarter.
→StableEarnings
- Expectation
- The company delivers at least 3 beats out of the next 4 quarters, keeping the cumulative miss count at zero.
CounterThe most recent beat was a narrow +0.44% surprise, suggesting estimates have been calibrated tightly to actual performance and the historical under-promise buffer may be narrowing.
At just 0.8% below the analyst price target, the stock has substantially realized the upside embedded in consensus estimates, making a fresh position from current levels a low-expected-value setup even with a risk/reward ratio of 2.91-to-1 calculated from a lower entry point.
→StablePrice targets
- Expectation
- A pullback to the entry support level near $130 or an analyst target revision above $165 restores meaningful upside for new buyers.
CounterPositive news sentiment and strong technical momentum have driven the stock to target, and the same catalysts could prompt upward analyst target revisions — supporting existing holders without requiring a price correction.
A golden cross, position above all major moving averages, and rising on-balance volume confirm that price momentum has been sustained by genuine accumulation — a technical backdrop that has historically supported continuation in high-quality industrial names.
→StableMomentum breakdown
- Expectation
- Price remains above the 200-day moving average over the next 12 months while momentum indicators stay positive, confirming the trend holds.
CounterA recent officer departure or appointment disclosed in regulatory filings introduces leadership uncertainty that could weigh on sentiment and interrupt the established technical trend.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Emerson Electric carries exceptional business quality — free cash flow at 134% of net income, a Piotroski F-Score of 8 out of 9, and three beats plus one in-line quarter with no misses — but the stock has run to within 0.8% of the analyst price target, leaving minimal near-term upside; existing holders have a well-supported position while fresh entry requires patience for a better setup.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.1 |
| ROA | 4.5 |
| Gross margin | 6.5 |
| Op margin | 9.7 |
| Net margin | 6.7 |
| Current ratio | 3.5 |
| FCF quality | 9.5 |
| Moat | 6.5 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 134% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
5.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.2 |
| EPS growth | 7.6 |
Momentum
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 2.8 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 7.5 |
| erm sentiment | 4.9 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸Negligible insider selling — $1,624,030 (0.002% of mkt cap)
Peer rank
3.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.8 |
| quality rank | 6.0 |
| growth rank | 2.4 |
Technical
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.7 |
| support resistance | 8.4 |
| 52w position | 7.0 |
Risk (lower is worse)
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.9 |
| days to cover | 6.0 |
| volatility | 4.9 |
| put call | 9.7 |
| implied vol | 6.4 |
| beta | 6.0 |
| debt equity | 6.8 |
Catalyst
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.1 |
| dividend safety | 4.8 |
- ▸Strong earnings: 3B/0M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:32d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.7<4.5
- ASYMMETRY:1.1<1.5@spot
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.06
Upside
+6.4%
Downside
6.1%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Technical at 7.7) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.7<4.5, ASYMMETRY:1.1<1.5@spot) reinforce the read. Current asymmetry R:R is 1.06 — supplementary context, not the trigger for this path.
The strongest dimensions are Technical at 7.7, Risk (lower is worse) at 7.0, and Sentiment at 6.8; the weakest are Momentum at 2.7, Peer rank at 3.3, and Insider at 5.0. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 1.06 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Cash Generation Quality
Trip ifFree cash flow falls below 80% of net income for 2 consecutive quarters, indicating the cash conversion quality has deteriorated.
- P2Consistent Earnings Delivery No Misses
Trip ifEPS surprise falls below 0% in either of the next 2 quarterly reports, breaking the no-miss streak.
- P3Near Target Limits Fresh Entry
Trip ifAnalyst consensus price target is revised above $165, restoring upside greater than 12% from the current price.
- P4Technical Momentum Broadly Positive
Trip ifPrice closes below $132 for 2 consecutive weeks, indicating a confirmed break of the uptrend.