Emerson Electric Well-Positioned in Growing Automation Markets

In our view, Emerson Electric is the undisputed powerhouse in process manufacturing on the west side of the Atlantic. Despite near-term headwinds in fiscal 2020 given low levels of gross fixed investment amid geopolitical uncertainty and COVID-19-related disruptions, we believe Emerson is poised for several years of positive organic growth after a slow recovery in early 2021. Emerson's total addressable automation market, both served and unserved, totals over $200 billion, of which approximately 59% is in hardware and services, 32% in control product software, and 9% stand-alone software. Even as Emerson holds either first or second share in a variety of product categories, share from established firms remains somewhat fragmented (depending on the category, Emerson holds roughly midteens market share), suggesting a large runway for growth.