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Emerson Electric Co. (EMR)
Intrinsic Value (DCF)
Current$148.02
→
Intrinsic$70.63
-52%
$40.40$70.63$130.81
Market implies 23% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $148, the market prices in continued strong cash flow growth (23%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $40 → Bull $131. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 4% | 6% | 8% | 10% |
|---|---|---|---|---|
| 8% | $91 | $101 | $113 | $125 |
| 10% | $56 | $63 | $71 | $79 |
| 12% | $38 | $43 | $48 | $54 |
| 14% | $27 | $31 | $35 | $39 |
Bull Case
- Bull case ($131) with 10% growth, 8% discount rate
- Conservative 8% growth assumption is achievable based on track record
Bear Case
- Bear case ($40) implies 73% downside at 6% growth, 12% discount
- Price reflects 23% growth expectations vs 8% historical — high bar to clear
- Trading 52% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$2.88B
Year 2$3.11B
Year 3$3.36B
Year 4$3.63B
Year 5$3.92B
Terminal$62.10B
📐 Model Inputs
Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$2.67BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.