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Emerson Looks Right - Right Place, Right Assets, Right Time, Right Valuation

Mar. 03, 2022 12:07 AM ETEmerson Electric Co. (EMR)AVVYY, HON, SBGSY, SIEGY3 Comments
Stephen Simpson profile picture
Stephen Simpson


  • Emerson offers leverage to accelerate mid-to-late-cycle end-markets, but also growing exposure to secular opportunities like hybrid automation and industrial software/digitalization.
  • I like the structure of the tie-up with Aspen, as it leaves the company with a high-multiple asset to leverage in future software M&A.
  • Management is already in the process of transitioning away from a heavy reliance on fossil fuel-driven process automation projects, but there are a lot of details left to fill in.
  • I expect a greater commitment to hybrid automation, including areas like controls, sensors, machine vision, and precision control.
  • Emerson shares look undervalued on the basis of long-term mid-single-digit growth and potentially transformative M&A.

Business process management and workflow automation diagram with gears and icons with connection line network in background. Manager touching interface

Anawat_s/iStock via Getty Images

At this point in the cycle, it’s pretty common for short-cycle industrials to slow and pass the baton on to companies with greater mid-to-late cycle exposure, and a process automation company like Emerson (NYSE:

This article was written by

Stephen Simpson profile picture
Stephen Simpson is a freelance financial writer and investor. Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds); now a semi-retired raccoon rancher. That last part isn't entirely true. Probably.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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