Emerson Electric - Comparative Multiple Analysis

Emerson Electric (Comparative Multiple Analysis)


Notes on the Comparative Multiple Analysis of Emerson Electric

WikiWealth compares Emerson Electric's revenue, EBITDA, and EBIT multiples to their peers in order to determine the appropriate fair valuation. Click in the top right corner to experiment with Emerson Electric's comparative analysis.

Notes from the analysis:

1. WikiWealth uses quantitative measures to determine the multiple range for Emerson Electric.
2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to Emerson Electric's debt holders.
3. Multiples incorporate benefits due to economies of scale; WikiWealth compares absolute enterprise value multiples to competitor's multiples.
4. WikiWealth excludes outliers when calculating individual company multiples.

Helpful Information for Emerson Electric's Analysis

How does this work? The Comparative Investment Analysis determines the value of Emerson Electric by comparing Emerson Electric financial ratios, prices, growth rates, margins, etc. to those of relevant peer groups.

Value Investing Importance? This method is widely used by investment professionals to determine the correct price of investments, especially initial public offerings (IPOs). It is one element of WikiWealth's three Wall Street approaches used to determine the correct fair value of Emerson Electric.

See the Emerson Electric cash flow (DCF) analysis for a completely different approach that's popular on Wall Street for determining the value of an investment in Emerson Electric.

Also, see the Emerson Electric's buffett intrinsic valuation analysis for WikiWealth's attempt to replicate the investing formula's used by Warren Buffett and Emerson Electric's valuation conclusion for a quick summary.