- Company name
- Emerson
- Sector
- Industrial automation
- About
- Emerson is a U.S. automation company. It sells control systems and software, test and measurement equipment, sensors, valves and other final control products, and safety and productivity tools to process, hybrid and discrete industries. It has three business groups: Software & Systems, Intelligent Devices, and Safety & Productivity. In fiscal 2025, it bought the rest of AspenTech, an industrial software company. Its fiscal year ends on September 30, and net sales were $18,982 million in fiscal 2026.
- Thesis
- Emerson trades at a premium because investors pay for its control systems and software, which serve long-cycle projects in its growth verticals. Underlying orders rose 14% in Q4 fiscal 2026, the adjusted segment EBITA margin was 29.1% and adjusted EPS rose 15% to $1.86. For fiscal 2027, the company expects underlying sales growth of about 5%, adjusted EPS of about $7.25 and free cash flow of $3.8 billion to $3.9 billion. It plans to return about $3.8 billion to shareholders, with about $2.5 billion of buybacks. The price assumes that growth speeds up from the 4% underlying sales growth of fiscal 2026 and that margins keep rising. For the premium to be earned, three things must be true. The strong Q4 orders must turn into sales growth near 5% in fiscal 2027. Software & Systems must keep growing faster than the rest of the company, as it did with sales growth of 14% in Q4. Free cash flow must reach the guidance, so that the buybacks do not add debt. The Q1 fiscal 2027 report, expected in early February 2027, gives the next test. If orders slow or margins stop rising, the premium can shrink within a year.
- Risks
- Conflicts can hurt sales. The conflict in the Middle East affected Q2 fiscal 2026 sales, when underlying sales grew only 0.5%.
Demand in Europe is weak. Sales in Europe fell 1% in fiscal 2026 and rose only 1% in Q4.
Process industries such as energy and chemicals delay projects when prices or profits fall. Fewer large projects can slow orders and sales.
Short-term borrowings and current debt were $4,667 million at September 30, 2026, and Emerson plans about $2.5 billion of buybacks in fiscal 2027. If cash flow falls short, debt can stay higher for longer.
Tariffs can raise costs. The fiscal 2026 guidance included refunds of IEEPA tariffs, and new tariffs can lower margins.
- Balance sheet
- Cash: $1.8B
Debt: $12.2B
Net debt: $10.4B
Debt due within 12 months: $4.7B
At September 30, 2026, Emerson had cash and equivalents of $1,806 million. Short-term borrowings and current maturities of long-term debt were $4,667 million, and long-term debt was $7,508 million, for total debt of $12,175 million. In fiscal 2026, Emerson repaid $588 million of long-term debt, paid dividends of $1,244 million and bought back $1,000 million of stock. In February 2026, it entered into a $2 billion 364-day credit facility that expires on February 9, 2027 and backs its commercial paper. Free cash flow was $3,535 million in fiscal 2026. For fiscal 2027, Emerson expects free cash flow of $3.8 billion to $3.9 billion and plans about $2.5 billion of buybacks and about $1.3 billion of dividends. Common stockholders' equity was $20,740 million.
As of 2026-09-30.
- Checkpoints
- Nov 4, 2026: Q4 fiscal 2026 results and fiscal 2027 guidance. Passed. Watch: Q4 adjusted EPS near $1.85, strong orders and fiscal 2027 guidance for higher adjusted EPS pass; weak orders or lower guidance fail. Outcome: Adjusted EPS rose 15% to $1.86, underlying orders rose 14% and Emerson guided fiscal 2027 adjusted EPS of about $7.25.
Feb 2, 2027 (estimate): Q1 fiscal 2027 results. Pending. Watch: Adjusted EPS of $1.58 to $1.62 or more, underlying sales growth near 5% and a confirmed fiscal 2027 outlook pass; slower orders or lower guidance fail.
- Recent events
- 2026-11-04: Emerson reported Q4 fiscal 2026 results. Net sales rose 7% to $5,201 million, and underlying orders rose 14%. The adjusted segment EBITA margin was 29.1%, GAAP EPS was $1.33 and adjusted EPS rose 15% to $1.86. For fiscal 2026, adjusted EPS was $6.59 and free cash flow was $3,535 million. For fiscal 2027, Emerson expects underlying sales growth of about 5%, adjusted EPS of about $7.25 and free cash flow of $3.8 billion to $3.9 billion. It raised the quarterly dividend by 7% to $0.595 per share.
2026-10-13: Emerson changed its accounting for actuarial gains and losses of its pension and other postretirement plans to mark-to-market accounting, effective for fiscal 2026. It excludes the yearly adjustment from adjusted EPS, and the change has no effect on cash flows.
2026-08-04: Emerson reported Q3 fiscal 2026 results. Net sales rose 7% to $4,873 million, underlying orders rose 7% and adjusted EPS rose 13% to $1.71. Free cash flow rose 36% to $1,323 million. Emerson raised its fiscal 2026 adjusted EPS guidance to about $6.55.
2026-05-05: Emerson reported Q2 fiscal 2026 results. Net sales rose 3% to $4,562 million, and underlying sales rose 0.5%, because the conflict in the Middle East affected sales. Adjusted EPS rose 4% to $1.54. The board elected Jennifer Newstead, General Counsel of Apple, as a director from August 3, 2026.
2026-02-10: Emerson entered into a $2 billion 364-day credit facility that expires on February 9, 2027. It supports its commercial paper, and Emerson said it has no current intention to borrow under it.