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Should You Buy Emerson Electric Co. (EMR) Stock Wednesday?

Wednesday, October 05, 2022 02:01 PM | InvestorsObserver Analysts
Should You Buy Emerson Electric Co. (EMR) Stock Wednesday?

InvestorsObserver gives Emerson Electric Co. (EMR) a strong valuation score of 61 from its analysis. The proprietary scoring system considers the underlying health of a company by analyzing its stock price, earnings, and growth rate. EMR currently holds a better value than 61% of stocks based on these metrics. Long term investors focused on buying-and-holding should find the valuation ranking system most relevant when making investment decisions.

Valuation Rank - 61
EMR gets a 61 Valuation Rank today. Find out what this means to you and get the rest of the rankings on EMR!

Metrics Analysis

EMR has a trailing twelve month Price to Earnings (PE) ratio of 14.8. The historical average of roughly 15 shows a average value for EMR stock as investors are paying fair share prices relative to the company's earnings. EMR's average trailing PE ratio shows that the firm has been trading around its fair market value recently. Its trailing 12-month earnings per share (EPS) of 5.28 justifies the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings.
EMR currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 1.7. The market is currently overvaluing EMR in relation to its projected growth due to the PEG ratio being above the fair market value of 1. EMR's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.

Summary

All together these valuation metrics paint a pretty poor picture for EMR at its current price due to a overvalued PEG ratio due to strong growth. The PE and PEG for EMR are worse than the average of the market resulting in a valuation score of 61. Click Here to get the full Report on Emerson Electric Co. (EMR) stock.

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