Wells Fargo Initiates Coverage On 4 Electric Equipment Stocks With Mixed Ratings

Wells Fargo analyst Joseph O'Dea initiated coverage on electrical equipment companies Emerson Electric, Eaton, Hubbell, and Rockwell Automation.
Emerson Electric Co. EMR was initiated with an Equal Weight rating and a price target of $99, implying an upside of 1.64%.
O'Dea views the company's 2023 EPS targets as achievable despite a challenging environment in some of the company's end markets. He adds that while relative valuation is "attractive," he does not see a clear catalyst to unlock the valuation discount.
Eaton Corporation PLC ETN was initiated with an Equal Weight rating and a price target of $159 price target, implying an upside of 3.23%.
O'Dea mentions the company has been "meaningfully upgraded" through the management's "transformational efforts," reducing its cyclical exposure and driving margin expansion.
He adds, while he has "reservations" about discounting the management's full earnings growth target of 11-13% CAGR through 2025, consensus estimates through FY23 do not look "stretched."
Rockwell Automation Inc ROK was initiated with an Underweight rating and a price target of $256, implying a downside of 16.02%.
O'Dea mentions, Rockwell is a "high-quality operator with a solid history of execution and outgrowth" versus industrial production, but the stock's relative valuation "looks rich versus history."
He adds that the company's "early-cycle favor has run its course" and that he does not see a clear case for meaningful positive earnings revisions in 2022 and 2023.
Hubbell Inc HUBB was initiated with an Equal Weight rating and a price target of $192, implying an upside of 4.48%.
The analyst said the company's estimates look "well-calibrated," though he is watching for consistent bolt-ons. O'Dea added that he currently sees the risk/reward on shares as "balanced."
Price Action: EMR shares are trading lower by 0.28% at $97.07, ROK lower by 1.00% at $301.80 during the premarket session on Friday. ETN closed higher by 1.46% at $153.92, and HUBB lower by 0.06% at $183.87 on Thursday.

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