- Wells Fargo analyst Joseph O'Dea initiated coverage on electrical equipment companies Emerson Electric, Eaton, Hubbell, and Rockwell Automation.
- Emerson Electric Co. EMR was initiated with an Equal Weight rating and a price target of $99, implying an upside of 1.64%.
- O'Dea views the company's 2023 EPS targets as achievable despite a challenging environment in some of the company's end markets. He adds that while relative valuation is "attractive," he does not see a clear catalyst to unlock the valuation discount.
- Eaton Corporation PLC ETN was initiated with an Equal Weight rating and a price target of $159 price target, implying an upside of 3.23%.
- O'Dea mentions the company has been "meaningfully upgraded" through the management's "transformational efforts," reducing its cyclical exposure and driving margin expansion.
- He adds, while he has "reservations" about discounting the management's full earnings growth target of 11-13% CAGR through 2025, consensus estimates through FY23 do not look "stretched."
- Rockwell Automation Inc ROK was initiated with an Underweight rating and a price target of $256, implying a downside of 16.02%.
- O'Dea mentions, Rockwell is a "high-quality operator with a solid history of execution and outgrowth" versus industrial production, but the stock's relative valuation "looks rich versus history."
- He adds that the company's "early-cycle favor has run its course" and that he does not see a clear case for meaningful positive earnings revisions in 2022 and 2023.
- Hubbell Inc HUBB was initiated with an Equal Weight rating and a price target of $192, implying an upside of 4.48%.
- The analyst said the company's estimates look "well-calibrated," though he is watching for consistent bolt-ons. O'Dea added that he currently sees the risk/reward on shares as "balanced."
- Price Action: EMR shares are trading lower by 0.28% at $97.07, ROK lower by 1.00% at $301.80 during the premarket session on Friday. ETN closed higher by 1.46% at $153.92, and HUBB lower by 0.06% at $183.87 on Thursday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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