UPDATE: Oppenheimer Raises PT to $61 on Emerson
Oppenheimer increases its price target to $61 on Outperform-rated Emerson (NYSE: EMR) as backlog supports guidance.
Oppenheimer says, "We estimate investor sentiment as anticipating that EMR likely capitulates on present guidance for FY12 EPS of $3.45-3.60 (up 7-11% y-o-y), given that 1Q EPS of $0.50 declined 21% y-o-y. We do not: we believe EMR is well positioned to hold the bottom 2/3 of the range intact, which would straddle our at-consensus FY12E of $3.50. Cost accounting vs. timing of revenue recognition at Process Management due to Thailand impact (shipment deferrals) should drive unprecedented FY2H OM at PM. With PM by far the largest component of the FY1Q12 y-o-y profit decline, the FY2H benefits from timing and margin impacts of shipments relative to production may not be fully appreciated."
EMR closed at $51.72 a share on Wednesday.
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