U.S. markets open in 4 hours 41 minutes
  • S&P Futures

    3,878.25
    -20.50 (-0.53%)
     
  • Dow Futures

    31,378.00
    -131.00 (-0.42%)
     
  • Nasdaq Futures

    13,198.50
    -81.25 (-0.61%)
     
  • Russell 2000 Futures

    2,256.20
    -18.60 (-0.82%)
     
  • Crude Oil

    60.40
    -0.24 (-0.40%)
     
  • Gold

    1,720.20
    -2.80 (-0.16%)
     
  • Silver

    26.13
    -0.55 (-2.05%)
     
  • EUR/USD

    1.2018
    -0.0042 (-0.35%)
     
  • 10-Yr Bond

    1.4460
    0.0000 (0.00%)
     
  • Vix

    23.77
    -4.18 (-14.96%)
     
  • GBP/USD

    1.3873
    -0.0047 (-0.34%)
     
  • USD/JPY

    106.8800
    +0.1500 (+0.14%)
     
  • BTC-USD

    49,243.53
    +2,129.23 (+4.52%)
     
  • CMC Crypto 200

    991.06
    +4.41 (+0.45%)
     
  • FTSE 100

    6,592.70
    +4.17 (+0.06%)
     
  • Nikkei 225

    29,408.17
    -255.33 (-0.86%)
     

P/E Ratio Insights for Emerson Electric

  • Oops!
    Something went wrong.
    Please try again later.
Benzinga Insights
·2 min read
  • Oops!
    Something went wrong.
    Please try again later.

 

In the current session, Emerson Electric Inc. (NYSE: EMR) is trading at $79.86, after a 5.82% spike. Over the past month, the stock increased by 13.89%, and in the past year, by 6.25%. With performance like this, long-term shareholders optimistic but others are more likely to look into the price-to-earnings ratio to see if the stock might be overvalued.

Assuming that all other factors are held constant, this could present itself as an opportunity for shareholders trying to capitalize on the higher share price. The stock is currently under from its 52 week high by 0.42%

The P/E ratio measures the current share price to the company's EPS. It is used by long-term investors to analyze the company’s current performance against its past earnings, historical data and aggregate market data for the industry or the indices, such as S&P 500. A higher P/E indicates that investors expect the company to perform better in the future, and the stock is probably overvalued, but not necessarily. It also shows that investors are willing to pay a higher share price currently, because they expect the company to perform better in the upcoming quarters. This leads investors to also remain optimistic about rising dividends in the future. 

View more earnings on EMR

Most often, an industry will prevail in a particular phase of a business cycle, than other industries. 

Compared to the aggregate P/E ratio of the 101.3 in the Electrical Equipment industry, Emerson Electric Inc. has a lower P/E ratio of 23.3. Shareholders might be inclined to think that the stock might perform worse than its industry peers. It’s also possible that the stock is undervalued. 

There are many limitations to price to earnings ratio. It is sometimes difficult to determine the nature of the earnings makeup of a company. Shareholders might not get what they're looking for, from trailing earnings.

See more from Benzinga

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.