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EMERSON STREET WRAP: Emerson Weak Demand ‘More Severe’ Than Ests
2015-04-06 14:09:04.772 GMT
By Rachel Layne
(Bloomberg) -- Emerson climbs as much as 0.8% after delayed
release of Feb. order figures, imply potential lower EPS for
FY2015 vs FY2014, ests., analysts say.
STIFEL (Robert P. McCarthy)
* Delayed Feb. order release timing on “pronounced weakness”
mgmt’s “desire to see how March orders were trending"; ‘‘no
sense of traction’’ on Network Power ‘‘as Telecom/IT
spending remains weak”
* Stock likely “weak today though sentiment remains
severe, and short interest high” without a “negative
pre-announcement, it will be interesting to see how
resilient”
* Stock likely “weak today though sentiment remains
severe, and short interest high” without a “negative
pre-announcement, it will be interesting to see how
resilient”</li></ul>
* Rates Buy, PT $66
CREDIT SUISSE (Julian Mitchell)
* After “a frenzy of strange speculation last week” on EMR
order release timing, commentary won’t be “a huge surprise
to most investors"; implies 1H organic sales up ~3%
* Read-throughs to electrical equip/multi-industry peers
‘‘are not particularly positive"; ROK most affected by
broader corp. capex trends, HON ‘‘HPS business should
still look ok for now”
* Read-throughs to electrical equip/multi-industry peers
‘‘are not particularly positive"; ROK most affected by
broader corp. capex trends, HON ‘‘HPS business should
still look ok for now”</li></ul>
* Rates outperform, cut PT to $66 from $70
WILLIAM BLAIR (Nicholas Heymann)
* FX, weaker end-mkt demand appears to be “more severe than
we previously anticipated"; still,‘‘remains feasible’’ EMR
can ‘‘return to double-digit EPS growth in fiscal 2016"; EMR
FY2015 EPS may now be down vs FY2014’s $3.75 WB est. $3.85,
consensus $3.78
* Order trends have potential to stay neg. over next
several mos. on strong USD, impact of lower oil prices,
O&G capex
* Order trends have potential to stay neg. over next
several mos. on strong USD, impact of lower oil prices,
O&G capex</li></ul>
* Market perform, PT $70
BERNSTEIN (Steven Winoker)
* ‘‘Further slowness’’ in process mgmt order book in coming
mos. seen ‘‘as capex cuts work their way through the order
chain"; may see orders, rev. ‘‘hole of 4+’’ qtrs later in
FY2015, through early FY2016 ‘‘where upstream capex has
deteriorated but downstream capex hasn’t yet improved”
* Stock needs to get past energy “hole"; Network Power needs
to hold pos. growth rates/expanding margin; Industrial
Automation needs plan; investors need more comfort w/M&A
* Rates market perform, PT $65
VERTICAL RESEARCH (Jeffrey Sprague)
* Process orders not neg. yet, ‘‘but numbers need to go
lower”
* Ests “below the street” and sees “path lower”
* Sees path lower, implication ~3% underlying order growth
* Rates hold, PT $55
DATA
* EMR 7 buys, 19 holds, 2 sells
* EMR 2Q qtrly results seen May 5 (Stifel);
* FY2015 adj. EPS est $3.77, saw yr adj. EPS $3.80-$3.90 (Feb
19): Bloobmerg data
* EMR short interest 1.72% of free float as of April 3 vs high
2.87% Jan. 26: Markit
* EMR down ~9% YTD vs peers SU FP +22%, HON +4%; ETN -0.2%,
ROK +1.4%, GE -1.3%
RELATED
* Earlier, Emerson Electric Feb. 3-Mo. Orders -10%; Sees 2Q
GAAP Sales -7%
* April 2, Emerson ’Still Compiling’ Order Data; May Be Weak:
Deutsche
* April 1, Emerson Feb. Orders ’Officially on the Late Side’ :
JPM
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Rachel Layne in Boston at +1-617-210-4634 or
rlayne@bloomberg.net
To contact the editor responsible for this story:
Arie Shapira at +1-212-617-1488 or
ashapira3@bloomberg.net
2015-04-06 14:09:04.772 GMT
By Rachel Layne
(Bloomberg) -- Emerson climbs as much as 0.8% after delayed
release of Feb. order figures, imply potential lower EPS for
FY2015 vs FY2014, ests., analysts say.
STIFEL (Robert P. McCarthy)
* Delayed Feb. order release timing on “pronounced weakness”
mgmt’s “desire to see how March orders were trending"; ‘‘no
sense of traction’’ on Network Power ‘‘as Telecom/IT
spending remains weak”
* Stock likely “weak today though sentiment remains
severe, and short interest high” without a “negative
pre-announcement, it will be interesting to see how
resilient”
* Stock likely “weak today though sentiment remains
severe, and short interest high” without a “negative
pre-announcement, it will be interesting to see how
resilient”</li></ul>
* Rates Buy, PT $66
CREDIT SUISSE (Julian Mitchell)
* After “a frenzy of strange speculation last week” on EMR
order release timing, commentary won’t be “a huge surprise
to most investors"; implies 1H organic sales up ~3%
* Read-throughs to electrical equip/multi-industry peers
‘‘are not particularly positive"; ROK most affected by
broader corp. capex trends, HON ‘‘HPS business should
still look ok for now”
* Read-throughs to electrical equip/multi-industry peers
‘‘are not particularly positive"; ROK most affected by
broader corp. capex trends, HON ‘‘HPS business should
still look ok for now”</li></ul>
* Rates outperform, cut PT to $66 from $70
WILLIAM BLAIR (Nicholas Heymann)
* FX, weaker end-mkt demand appears to be “more severe than
we previously anticipated"; still,‘‘remains feasible’’ EMR
can ‘‘return to double-digit EPS growth in fiscal 2016"; EMR
FY2015 EPS may now be down vs FY2014’s $3.75 WB est. $3.85,
consensus $3.78
* Order trends have potential to stay neg. over next
several mos. on strong USD, impact of lower oil prices,
O&G capex
* Order trends have potential to stay neg. over next
several mos. on strong USD, impact of lower oil prices,
O&G capex</li></ul>
* Market perform, PT $70
BERNSTEIN (Steven Winoker)
* ‘‘Further slowness’’ in process mgmt order book in coming
mos. seen ‘‘as capex cuts work their way through the order
chain"; may see orders, rev. ‘‘hole of 4+’’ qtrs later in
FY2015, through early FY2016 ‘‘where upstream capex has
deteriorated but downstream capex hasn’t yet improved”
* Stock needs to get past energy “hole"; Network Power needs
to hold pos. growth rates/expanding margin; Industrial
Automation needs plan; investors need more comfort w/M&A
* Rates market perform, PT $65
VERTICAL RESEARCH (Jeffrey Sprague)
* Process orders not neg. yet, ‘‘but numbers need to go
lower”
* Ests “below the street” and sees “path lower”
* Sees path lower, implication ~3% underlying order growth
* Rates hold, PT $55
DATA
* EMR 7 buys, 19 holds, 2 sells
* EMR 2Q qtrly results seen May 5 (Stifel);
* FY2015 adj. EPS est $3.77, saw yr adj. EPS $3.80-$3.90 (Feb
19): Bloobmerg data
* EMR short interest 1.72% of free float as of April 3 vs high
2.87% Jan. 26: Markit
* EMR down ~9% YTD vs peers SU FP +22%, HON +4%; ETN -0.2%,
ROK +1.4%, GE -1.3%
RELATED
* Earlier, Emerson Electric Feb. 3-Mo. Orders -10%; Sees 2Q
GAAP Sales -7%
* April 2, Emerson ’Still Compiling’ Order Data; May Be Weak:
Deutsche
* April 1, Emerson Feb. Orders ’Officially on the Late Side’ :
JPM
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Rachel Layne in Boston at +1-617-210-4634 or
rlayne@bloomberg.net
To contact the editor responsible for this story:
Arie Shapira at +1-212-617-1488 or
ashapira3@bloomberg.net