AVVYY - Emerson Looks Right - Right Place Right Assets Right Time Right Valuation

• Emerson offers leverage to accelerate mid-to-late-cycle end-markets, but also growing exposure to secular opportunities like hybrid automation and industrial software/digitalization.
• I like the structure of the tie-up with Aspen, as it leaves the company with a high-multiple asset to leverage in future software M&A.
• Management is already in the process of transitioning away from a heavy reliance on fossil fuel-driven process automation projects, but there are a lot of details left to fill in.
• I expect a greater commitment to hybrid automation, including areas like controls, sensors, machine vision, and precision control.
• Emerson shares look undervalued on the basis of long-term mid-single-digit growth and potentially transformative M&A.

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