EMR - Emerson Electric downgraded to Hold at Argus Research

Emerson Electric ( NYSE: EMR ) on Tuesday was downgraded to Hold from an investment rating of Buy by analysts at Argus Research. They said the technology and engineering company faces challenges such as recent mergers and acquisitions activity.

Emerson ( EMR ) “over the long term can generate high single-digit EPS growth, driven by 3%-4% revenue growth, margin improvement and share buybacks,” according to Argus. “Near-term trends, however, have been problematic including a recent EPS miss due to higher-than-expected stock compensation.”

Despite the downgrade, Argus rates Emerson ( EMR ) as a long-term Buy.

“We may look to move the stock back to the Buy list if it falls back to technical support near $75 or the EPS outlook settles post-transactions,” Argus said.

Emerson’s ( EMR ) stock fell 7.5% in the 12 months through February 13 to close at $86.91 a share, compared with a 9% decline for the Standard & Poor’s 500 stock index ( SP500 ).

Emerson ( EMR ) last month said it had offered to buy National Instruments ( NATI ) in a deal valued at $7.6 billion. National Instruments has said its board was weighing strategic alternatives and potential acquirers already had approached the company.

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