Industrial - Machinery · NYSE
Current Price
$136.56
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Emerson Electric Co. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Emerson Electric Co., a technology and engineering company, provides various solutions for customers in industrial, commercial, and residential markets in the Americas, Asia, the Middle East, Africa, and Europe. The company operates through Automation Solutions, and Commercial & Residential Solutions segments. The Automation Solutions segment offers measurement and analytical instrumentation, industrial valves and equipment, and process control software and systems. It serves oil and gas, refining, chemicals, power generation, life sciences, food and beverage, automotive, pulp and paper, metals and mining, and municipal water supplies markets. The Commercial & Residential Solutions segment offers residential and commercial heating and air conditioning products, such as reciprocating and scroll compressors; system protector and flow control devices; standard, programmable, and Wi-Fi thermostats; monitoring equipment and electronic controls for gas and electric heating systems; gas valves for furnaces and water heaters; ignition systems for furnaces; sensors and thermistors for home appliances; and temperature sensors and controls. It also provides reciprocating, scroll, and screw compressors; precision flow controls; system diagnostics and controls; and environmental control systems. In addition, this segment offers air conditioning, refrigeration, and lighting control technologies, as well as facility design and product management, site commissioning, facility monitoring, and energy modeling services; tools for professionals and homeowners; and appliance solutions. Emerson Electric Co. was incorporated in 1890 and is headquartered in Saint Louis, Missouri.
ROIC (TTM)
7.4%
ROE (TTM)
11.6%
FCF Yield
3.35%
Based on trailing twelve-month data, EMR shows a free cash flow per share of N/A and a ROIC of 7.4%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 3.35% are important context metrics when evaluating EMR's stock valuation relative to peers.
The intrinsic value of EMR depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether EMR is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $136.56. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Emerson Electric Co.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Industrial - Machinery industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting EMR's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Emerson Electric Co., this means projecting how much free cash flow the Industrial - Machinery will produce over the next 5-10 years, then discounting those amounts to today's dollars. EMR's ROIC of 7.4% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For EMR, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
