Emerson Electric Co. (NYSE:EMR) just released its second-quarter report and things are looking bullish. Emerson Electric beat earnings, with revenues hitting US$4.4b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 11%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Taking into account the latest results, the current consensus from Emerson Electric's 22 analysts is for revenues of US$17.6b in 2024. This would reflect a reasonable 6.2% increase on its revenue over the past 12 months. Statutory earnings per share are expected to dip 3.9% to US$3.25 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$17.6b and earnings per share (EPS) of US$3.26 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of US$127, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Emerson Electric, with the most bullish analyst valuing it at US$139 and the most bearish at US$110 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Emerson Electric is an easy business to forecast or the the analysts are all using similar assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Emerson Electric is forecast to grow faster in the future than it has in the past, with revenues expected to display 13% annualised growth until the end of 2024. If achieved, this would be a much better result than the 4.6% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.6% annually. Not only are Emerson Electric's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$127, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Emerson Electric. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Emerson Electric analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Emerson Electric , and understanding this should be part of your investment process.

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