Emerson Electric Co. Prepares for Q4 Earnings Release

As Emerson Electric Co. announces its upcoming Q4 earnings report, expectations are high with predicted EPS growth of 14%. However, past performance shows a mixed results history, raising concerns among investors following a recent decline in cash reserves.

Date: 20-10-2024

AI Rating: 6

Emerson Electric Co. is gearing up to report its Q4 earnings, with analysts anticipating an earnings per share (EPS) of $1.47, reflecting a 14% increase from $1.29 year-over-year. This projected growth could positively impact investor sentiment, especially since the company has successfully surpassed Wall Street's estimates in three of the last four quarters.

The company also reported adjusted earnings of $1.43 per share for the previous quarter, which slightly exceeded consensus estimates. Looking ahead to fiscal 2024, Emerson is projected to report an EPS of $5.48, a notable increase of 23.4% from $4.44 in fiscal 2023, showcasing positive long-term growth prospects.

Despite these promising numbers, there are concerns stemming from recent performance. The company's revenue of $4.38 billion for Q3 did not meet analysts' expectations, which led to a more than 7% drop in share price recently. Additionally, the decline in free cash flow has been alarming, with cash reserves falling to $2.3 billion from $8.1 billion last year, inducing stress on investor confidence.

In terms of market performance, EMR stock is up 13.5% year-to-date, which is significantly lower than the broader S&P 500’s 23% gains. The consensus from analysts remains moderately optimistic, with an average price target suggesting potential upside of 14.8%. This mixed outlook highlights a crucial point for investors as they weigh potential risks against growth opportunities.

Stocks: EMR SPX XLI