EMR - Emerson Electric downgraded to Hold rating at Deutsche Bank

Emerson Electric ( NYSE: EMR ) was downgraded to an investment rating of Hold from Buy by analysts at Deutsche Bank.

They said Emerson’s agreement to sell a majority interest in its climate technologies business, which makes products for heating, ventilation and air conditioning, to private-equity company Blackstone ( BX ) was “the long-term move for the business.”

Emerson may be able to divest its newly named Safety and Productivity unit as part of its broader effort to unload non-core assets and focus on industrial automation and technology, the bank said.

Deutsche Bank lowered its price target for Emerson to $96 a share from $97 a share.

Emerson today said it had completed its $3 billion divestiture of its InSinkErator business, which makes garbage disposals and instant hot-water dispensers, to Whirlpool ( WHR ). Emerson had bought the company in 1968. This year it also announced a deal to sell its Therm-O-Disc sensing-and protection-technology business to One Rock Capital Partners.

Emerson’s strategy to focus on industrial automation started last year with the merger of two of its software businesses with Aspen Technology ( AZPN ). Emerson also has acquired several technology companies to build up the business.

Emerson yesterday reported adjusted EPS for its fiscal fourth quarter of $1.53, beating Wall Street’s consensus estimate by $0.14. Revenue rose 8.3% from a year earlier to $5.26 billion, beating the average estimate by $30 million.

Emerson's stock this year fell 5.7% through the end of Oct. 31, compared with a 19% decline for the S&P 500 index ( SP500 ).

Seeking Alpha contributor Matthew Smith rates Emerson ( EMR ) as a Buy on the company's efforts to focus on industrial automation through acquisitions and divestitures .

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