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Loop Capital's Chris Dankert raised their price target on Emerson Electric Co (NYSE: EMR) by 3.8% from $130 to $135 on 2024/05/11. The analyst maintained their Strong Buy rating on the stock.

Enhanced organic sales growth and a favorable mix contributed to the company's "solid" performance, Dankert highlighted after reviewing Emerson Electric Co's Q2 2024 earnings report released on 2024/05/08.

The company is in a strong position to capitalize on several secular tailwinds, the analyst told investors.

Moreover, Emerson Electric Co's shift to 100% automation "supports multiple expansion," Dankert noted.

Earnings Report

For Q2 2024, Emerson Electric Co reported:

• EPS of $1.36, which beat the Zacks Consensus Estimate of $1.26 and, by 25%, Q2 2023’s $1.09.
• Revenue of $4.38B, which beat the Zacks Consensus Estimate by 2.02% and, by 17%, Q2 2023’s $3.76B.
• Operating cash flow of $757M, up 32% Y/Y.
• Free cash flow of $675M, up 32% Y/Y.

Management guided:

For Q3 2024:

• EPS of $1.38 to $1.42.
• Revenue growth of 11% to 12.5%.

For FY 2024:

• EPS of $5.40 to $5.50.
• Revenue growth of 15% to 16%.
• Operating cash flow of $3.1B.
• Free cash flow of $2.7B.

President & CEO Lal Karsanbhai commented: “Emerson's outstanding execution continued in Q2, with sales growth, margin expansion and earnings all exceeding expectations.

“Underlying orders met our low-single-digit growth expectations for 1H 2024, supported by process and hybrid end markets. 

“The strong performance and relentless focus on execution give us the confidence to update our FY 2024 outlook.”

“Our Q2 performance, especially our gross margin performance, demonstrates the strength of our transformed portfolio and our Emerson Management System. 

“We are well positioned to continue delivering differentiated solutions to our customers and creating value for our shareholders.”