EMR – Market expectations are for Uniform ROA to expand to peak levels, but management may be concerned about macro headwinds, free cash flow, and restructuring plans

• Emerson Electric Co. (EMR:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) Earnings, with a 21.1x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about macro headwinds, free cash flow, and restructuring plans
• Specifically, management is confident the Board has not approved their recent restructuring plans, and they may be concerned about a consumer shift from replacing to repairing units. Furthermore, they may be concerned about geopolitical uncertainty, potential green air policy changes in Asia, and weakness in their global end markets, particularly in Europe and Latin America. Finally, they may lack confidence in their ability to optimize cost structures and increase free cash flow, particularly in their commercial and residential solutions business.