Emerson Eletric Co.

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker	Analyst	Analyst Email
Langenberg, LLC	Brian K. Langenberg	brian@langenberg-llc.com
Oppenheimer	Christopher glynn	christopher.glynn@opco.com
RBC Capital Markets	Deane M. Dray	deane.dray@rbccm.com
Longbow Research	Eli Lustgarten	elustgarten@longbowresearch.com
Cowen & Company	Gautam Khanna	gautam.khanna@cowen.com
Deutsche Bank Research	john g. Inch	john.inch@db.com
CRT Capital Group	Josh W. Sullivan	jwsullivan@sterneageecrt.com
Buckingham Research	Joshua Pokrzywinski	jpokrzywinski@buckresearch.com
Credit Suisse	Julian Mitchell	julian.mitchell@credit-suisse.com
William Blair	Nicholas P. Heymann	nheymann@williamblair.com
Wells Fargo Securities	Richard M. Kwas	rich.kwas@wellsfargo.com
Atlantic Equities	Richard Radbourne	r.radbourne@atlantic-equities.com
Stifel Nicolaus	Robert P. McCarthy	mccarthyr@stifel.com
Bernstein Research	Steven E. winoker	steven.winoker@bernstein.com

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Primary Input Data

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Derived Input Data

Derived Input	Label	2015 Value	2016 Value	Equational Form
Net Operating Profit Less Adjusted Taxes	NOPLAT	2,182	2,306	$NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)$
Free Cash Flow	FCF	1,822	2,230	$FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS$
Tax Shield	TS	69	66	$TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income$
Invested Capital	IC	13,752	13,325	$IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital$
Return on Invested Capital	ROIC	15.87%	17.31%	$ROIC\,=\,\frac { NOPLAT }{ IC }$
Net Investment	NetInv	(280)	(427)	$NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation$
Investment Rate	IR	-12.83%	-18.52%	$IR\,=\,\frac {NetInv}{NOPLAT}$
Weighted Average Cost of Capital	WACC_Market	8.83%	8.56%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	8.62%	9.09%
Enterprise value	EV_Market	32,314	36,154	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	31,649	35,500
Long-Run Growth	g = IR x ROIC	-2.04%	-3.20%	Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
Long-Run Growth	g = % $\Delta$ GDP	2.50%	2.50%
Margin from Operations	M	15.05%	20.63%	$M\,\,=\,\,\frac{EBIT}{SALES}$
Depreciation/Amortization Rate	D	19.53%	0.00%	$D\,\,=\,\,\frac{D+A}{EBITDA}$

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form	Observed Value		Single-stage multiple g solution		Two-stage valuation model g solution
Equational Form	12/31/2015	12/31/2016	12/31/2015	12/31/2016	12/31/2015	12/31/2016
EV/SALES $\frac {EV}{Sales} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)$	1.45	2.10	3.61%	3.46%	4.03%	4.58%
EV/EBITDA $\frac {EV}{EBITDA} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)$	7.75	10.19	3.61%	3.46%	4.03%	4.58%
EV/NOPLAT $\frac {EV}{NOPLAT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}$	14.81	15.68	3.61%	3.46%	4.03%	4.58%
EV/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	17.74	16.21	3.61%	3.46%	4.03%	4.58%
EV/EBIT $\frac {EV}{EBIT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	9.63	10.19	3.61%	3.46%	4.03%	4.58%
EV/IC $\frac {EV}{IC} \,= \,\frac{ROIC\, -\, g}{WACC\,-\,g}$	2.35	2.71	3.61%	3.46%	4.03%	4.58%

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