Emerson Electric (EMR) Outpaces Stock Market Gains: What You Should Know

·3-min read

In the latest trading session, Emerson Electric (EMR) closed at $84.94, marking a +1.48% move from the previous day. This change outpaced the S&P 500's 1.42% gain on the day. Elsewhere, the Dow gained 1%, while the tech-heavy Nasdaq added 5.16%.

Prior to today's trading, shares of the maker of process controls systems, valves and analytical instruments had gained 1.2% over the past month. This has outpaced the Industrial Products sector's loss of 4.45% and the S&P 500's gain of 0.27% in that time.

Wall Street will be looking for positivity from Emerson Electric as it approaches its next earnings report date. On that day, Emerson Electric is projected to report earnings of $0.97 per share, which would represent a year-over-year decline of 24.81%. Meanwhile, our latest consensus estimate is calling for revenue of $3.65 billion, down 23.86% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.07 per share and revenue of $14.96 billion, which would represent changes of -22.48% and -23.78%, respectively, from the prior year.

Any recent changes to analyst estimates for Emerson Electric should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.07% higher within the past month. Emerson Electric is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Emerson Electric is holding a Forward P/E ratio of 20.56. Its industry sports an average Forward P/E of 20.08, so we one might conclude that Emerson Electric is trading at a premium comparatively.

Investors should also note that EMR has a PEG ratio of 2.42 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Manufacturing - Electronics was holding an average PEG ratio of 2.27 at yesterday's closing price.

The Manufacturing - Electronics industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 68, putting it in the top 27% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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