Emerson’s Weaker-Than-Expected Print Doesn’t Alter Our Long-Term Thesis

Wide-moat-rated Emerson turned in a softer-than-expected fiscal first quarter, but we’re not changing our $105 fair value estimate. This quarter was the first time we saw new financials following Emerson’s resegmentation. As we reassessed following the additional disclosure, we model at the low end of the organic sales and adjusted EPS guide, which we think looks a bit stretched at this juncture. That said, management maintained the guide. This factor, the robust backlog of $6.6 billion, and the fact that we’re only one quarter through the year lead us to give the company the benefit of the doubt, for now.