UPDATE: Credit Suisse Downgrades Emerson (EMR) to Neutral
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(Updated - August 19, 2016 10:48 AM EDT)
Credit Suisse downgraded Emerson (NYSE: EMR) from Outperform to Neutral with a price target of $57 (unchanged). The change follows news it will acquire Pentair’s Valves & Controls business for $3.15 billion. Analyst Julian Mitchell said he sees few catalysts.
"Our TP remains $57, and our EPS estimates (on the current EMR basis) are unchanged; we show inside our pro forma forecasts including PNR V&C. While we think the deal has solid strategic logic, EMR has now unveiled many of the strategic moves which we anticipated in our report in April 2015 (‘Accelerated strategic change’), and the stock is now close to our TP. Following the plethora of recent portfolio announcements from the company, the relative paucity of upcoming catalysts (we do not expect further large imminent acquisitions or divestments), and the stock’s valuation multiple recovery YTD, we view the risk/reward as fairly balanced," said Mitchell.
Shares of Emerson closed at $54.67 yesterday.
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