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Did Emerson Electric Beat Analysts’ 1Q17 Earning Estimates?

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Part 4
Did Emerson Electric Beat Analysts’ 1Q17 Earning Estimates? PART 4 OF 4

What Can We Expect from Emerson Electric’s Future Earnings?

Emerson Electric’s 2017 guidance

Following its fiscal 1Q17 results and considering an improvement in order trends, Emerson Electric (EMR) revised up its fiscal 2017 EPS (earnings per share) guidance. Earnings per share from continuing operations were raised to the range of $2.47–$2.62, compared with the previous range of $2.35–$2.50.

This includes the $0.07 income tax benefit from fiscal 1Q17. However, the company continues to exclude any potential impact from the pending Pentair (PNR) Valves and Controls acquisition.

What Can We Expect from Emerson Electric’s Future Earnings?

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Emerson Electric expects its underlying sales to range from flat to down 2% compared to its prior guidance of a 1%–3% dip on a YoY (year-over-year) basis. EMR maintained its net sales guidance at 1%–3% lower, compared to its reported net sales in 2016.

Analysts’ expectations

Following Emerson Electric’s 1Q17 results, analysts revised up their future EBITDA1 estimates for EMR. For the coming quarter, analysts expect Emerson’s EBITDA to be ~$729 million, compared to the pre-1Q17 estimates of $718 million.

However, analysts maintained the company’s fiscal 2Q17 EBITDA margins at 20.5%. Analysts’ expectations are in line with the company’s revised 2017 guidance.

Current price target

After its fiscal 1Q17 results were released, among the major banks (IYF) covering Emerson Electric stock, Barclays (BCS) revised up the company’s target price from $56 to $63 and maintained its “equal weight” rating on the stock.

On February 8, 2017, Emerson Electric’s consensus, 12-month target price was $56.62, up from its pre-1Q17 target price of $54.90. The company’s stock price closed at ~$62.54 on February 7, 2017.

For more on industrial (IYJ) companies, investors can look into Market Realist’s mergers and acquisitions series on Stanley Black & Decker (SWK), Rockwell Collins (COL), and Honeywell (HON).

  1. earnings before interest, tax, depreciation and amortization
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