There's not a lot more left to say about the state of
multi-market industrial conglomerates that I haven't already said.
Companies that have outsized exposure to commodity/resource markets and
emerging markets, and that definitely includes Emerson (NYSE:EMR),
are getting hit hard and there isn't much relief in sight. Although
Emerson's CEO believes that orders will bottom in the spring of this
year, that's well outside of the norm of what most peer company CEOs are
saying and the company's lack of exposure to relatively healthier
markets like aerospace, auto, food/bev is a drawback.
Emerson has been going through tough times longer than
its peer group and management seems more realistic about the need for
capacity curtailments. Even so, I think the company could find it hard
to get full value for its Network Power business and the Industrial
Automation assets it has targeted for sale. Emerson scores well for its
margins and returns on capital, but it's hard for me to see how the
company generates enough revenue growth to really drive an attractive
fair value from here.
Click here for the full article:
Emerson Skidding On The Oil Spill
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