Emerson Electric (NYSE:EMR) is advancing well with its portfolio-optimization strategy through acquisitions and divestitures. In the process, the technology and engineering company could sell a portion of its commercial & residential solutions business to Blackstone (NYSE:BX), Bloomberg reported citing people familiar with the matter.
The report highlighted that the deal, which may not materialize, could fetch Emerson $5 billion to $10 billion, depending upon the size of the portfolio put up for sale.
The move aligns with EMR’s strategy to capitalize on high-growth industry verticals and technology segments. Notably, Emerson is in the middle of a transformation that aims to create a company with a diversified and sustainable portfolio.
Earlier, EMR announced that it completed the combination of its industrial software businesses with AspenTech to form a new company named AspenTech (NASDAQ:AZPN). EMR owns a majority stake of 55% in the new company. Further, it also completed the acquisition of Fluxa. Also, EMR agreed to acquire Micromine to optimize its software offerings.
On the other hand, it concluded the sale of its Therm-O-Disc sensing and protection technologies business. Moreover, it announced the sale of InSinkErator to Whirlpool Corporation (NYSE:WHR) for $3 billion. Also, it recently announced the divestiture of its Russian business.
Is Emerson a Good Investment?
The company continues to witness double-digit growth in orders and is benefiting from strong demand for its tech and software solutions. Further, Emerson’s recent acquisitions will likely accelerate its growth and expand its product offerings. However, analysts are cautiously optimistic about Emerson stock, given the macro uncertainty.
It has received five Buy and eight Hold recommendations for a Moderate Buy consensus rating. Further, the average price target of $93.77 implies 19.8% upside potential.
Though the stock has positive signals from retail investors and bloggers, hedge funds sold 43.1K EMR shares last quarter. Further, EMR stock has a Neutral Smart Score of 5 out of 10 on TipRanks.
