By Sam Boughedda
Emerson Electric (NYSE:EMR) was lifted to Overweight from Equal-Weight, with its price target raised to $96 from $95 per share by Morgan Stanley analysts on Tuesday.
The analysts argued in a note that the EMR risk/reward is among the best in its coverage universe.
Morgan Stanley sees an improving catalyst path on two fronts for EMR, which are the National Instruments (NASDAQ:NATI) resolution "being a win-win" and the fact they expect orders to accelerate.
"Since the National Instruments bid, shares are down 16% vs. EE/MI and S&P 500 down 3% and 1%, respectively. The resolution potentially looks like a win-win for shares, in our view. We believe that EMR is unlikely to bid above ~$55/share vs. its current $53/share offer or, more likely, will not win the bid," the analysts wrote.
"We expect orders to accelerate, possibly as peers decelerate or decline. Fundamentally, we see process capex accelerating as other industrial verticals start to moderate based on a comparatively low starting point," they added.