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Emerson Electric (NYSE:EMR) on Tuesday was upgraded to Outperform from a prior investing rating of Peer Perform by analysts at Wolfe Research. They said the technology and engineering company is entering a “new phase” with its planned acquisition of National Instruments (NASDAQ:NATI).
“National Instruments (NATI) is a quality asset that increases Emerson’s (EMR) core growth potential and margin structure, and also diversifies the portfolio into more attractive discrete industries where we see re-shoring investments,” Nigel Coe, analyst at Wolfe, said in an April 18 report. “With this bid, we exit the period of portfolio and capital allocation uncertainty, and into the execution phase.”
Wolfe set a price target of $103 a share for Emerson (EMR), based on a blended price-to-earnings multiple of 19 times including $85 a share for its core business, $12 a share for its ownership interest in AspenTech and $6 a share for the company’s residual ownership in its climate technologies business that is being divested.
Emerson (EMR) last week agreed to buy National Instruments (NATI) for $60 a share in cash for a total value of $8.2 billion.