Argus cuts Emerson Electric to Hold, sees ‘problematic’ recent trends

Argus analyst John Eade downgraded Emerson Electric to Hold from Buy. While the company should be able to generate high single-digit earnings growth with 3%-4% revenue growth and margin improvement in the long term, its near-term trends have been "problematic", including a recent Q1 earnings miss due to higher-than-expected stock compensation, the analyst tells investors in a research note. The company is also embarking on a couple of challenging M&A projects, and these could further dilute Emerson management’s attention, even though valuations on the stock are "reasonable", the firm adds.