Emerson Electric Co (NYSE: EMR) down more than 10% for the year is an opportunity to buy a quality name at a deep discount, says Joseph O’Dea – a Wells Fargo analyst.
Emerson stock could climb 23% from here
On Thursday, O’Dea upgraded the engineering services company to “overweight” and raised his price objective to $105 that translates to a 23% upside from here.
The analyst is bullish on Emerson stock primarily for the company’s exclusive focus on industrial automation. His research note reads:
There’s arguably more upside to valuation for a high margin, pure play automation company. We’d expect that to be realised through solid operational and integration execution.
Emerson Electric is scheduled to report its Q2 results on May 3rd. Consensus is for it earn 97 cents a share this quarter versus $1.29 per share a year ago.
Jim Cramer agrees with the bullish view
A prominent reason why Emerson stock has underperformed in 2023 was its hostile bid for National Instruments Corp.
Last week, though, the Fortune 500 company confirmed that “NATI” has agreed to be acquired for $60 a share. Emerson expects the said agreement to be accretive not only to growth but also help improve its margin profile.
Remember that “EMR” is a dividend stock that currently pays a yield of 2.41% – an additional reason to own it.
Also on Thursday, famed investor and Mad Money host Jim Cramer also agreed that the company’s shares were indeed undervalued at current levels. Last year, Blackstone announced a majority stake in Emerson’s Climate Technologies unit as Invezz reported HERE.
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