Emerson Electric Co. (EMR) Intrinsic Value & DCF Valuation
Industrial - Machinery · NYSE
Current Price
$145.73
Intrinsic Value
$165.25
+11.8% margin of safety
What Is Emerson Electric Co.'s Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of Emerson Electric Co. (EMR) at $165.25 per share, compared with a market price of $145.73, a margin of safety of +11.8%. The base case assumes 9.0% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $137.05 to $197.38. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Emerson Electric Co. (EMR) Undervalued?
At $145.73, EMR trades about 11.8% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Industrial Automation Leadership
Emerson holds a strong position in industrial automation, offering integrated solutions that drive efficiency and productivity for diverse industries.
↑Sticky Customer Relationships
High switching costs for customers using Emerson's integrated automation and software platforms create durable customer loyalty.
↑Brand Reputation and Trust
Decades of reliable performance and innovation have built a strong brand reputation, fostering trust among industrial clients.
INVESTMENT RISKS
↓Economic Downturn Impact
A significant economic slowdown could reduce industrial capital expenditures, impacting demand for Emerson's products and services.
↓Technological Obsolescence
Rapid advancements in automation and digital technologies require continuous investment to avoid product obsolescence.
↓Integration Challenges
Successfully integrating acquired businesses and technologies is crucial for realizing synergies and maintaining competitive advantage.
Base case
EMR base case valuation
Intrinsic Value
$165.25
Margin of safety
+11.8%
Expected annual return
+2.5%
Base case assumptions: 9.0% annual growth, 10.0% discount rate, 26x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the EMR valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Emerson Electric Co. respond.
Open DCF Calculator for EMRCompany Overview
Emerson Electric Co. is an international technology and engineering firm that delivers diverse solutions to industrial, commercial, and residential clients across the Americas, Asia, the Middle East, Africa, and Europe. The company's operations are divided into two main segments: Automation Solutions, and Commercial & Residential Solutions. Through its Automation Solutions division, Emerson provides a range of products including advanced measurement and analytical instruments, industrial valves, and sophisticated process control software and systems. This segment caters to a broad spectrum of industries such as oil and gas, refining, chemical processing, power generation, life sciences, food and beverage, automotive manufacturing, pulp and paper production, metals and mining, and municipal water utilities. The Commercial & Residential Solutions segment focuses on climate control and other essential home and business applications. It supplies residential and commercial heating and air conditioning (HVAC) products, encompassing various compressors (reciprocating and scroll), system protectors, precise flow control devices, and a variety of thermostats (standard, programmable, and Wi-Fi enabled). The segment also delivers monitoring equipment and electronic control units for both gas and electric heating setups, specialized gas valves for furnaces and water heaters, furnace ignition systems, and an array of sensors and thermistors for home appliances, alongside general temperature sensors and controls. Furthermore, this division supplies reciprocating, scroll, and screw compressors, along with precision flow control mechanisms, comprehensive system diagnostics, and advanced environmental control systems. Beyond hardware, it extends its portfolio to include technologies for air conditioning, refrigeration, and lighting management. Complementing these offerings are services like facility design and product lifecycle management, site commissioning, ongoing facility monitoring, and energy modeling. The segment also manufactures tools for both professional tradespeople and DIY enthusiasts, and offers a suite of appliance solutions. Established in 1890, Emerson Electric Co. maintains its corporate headquarters in Saint Louis, Missouri.
Financial Metrics — EMR Stock Valuation Data
Revenue/Share (TTM)
$32.66
FCF/Share (TTM)
$5.55
ROIC (TTM)
7.7%
ROE (TTM)
12.1%
P/FCF
26.2x
EV/EBITDA
18.3x
FCF Yield
3.82%
Debt/Equity
0.69x
Based on trailing twelve-month data, EMR shows a free cash flow per share of $5.55 and a ROIC of 7.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 26.2x and FCF yield of 3.82% are important context metrics when evaluating EMR's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of EMR?
Emerson Electric Co. currently generates $5.55 in free cash flow per share. At the current price of $145.73, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is EMR undervalued?
EMR trades at a P/FCF ratio of 26.2x with a free cash flow yield of 3.82%. This P/FCF is in a moderate range. However, whether EMR is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value EMR stock using DCF?
To perform a DCF valuation on Emerson Electric Co.: (1) Start with the trailing free cash flow per share ($5.55) 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 — with a debt-to-equity of 0.69x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to EMR?
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 company will produce over the next 5-10 years, shaped by Industrial - Machinery trends, then discounting those amounts to today's dollars. EMR's ROIC of 7.7% means the company's return on invested capital sits below the level that typically clears its cost of capital.
How does WACC affect EMR stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For EMR, with a debt-to-equity ratio of 0.69x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 18.3x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See EMR PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Industrials valuationsDCF and P/E value EMR with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.