RBC Capital Reaffirms Outperform on Emerson Electric (EMR) Despite Middle East Headwinds

Emerson Electric Co. (NYSE:EMR) is included among the 10 Best Blue Chip Stocks to Buy for Your Retirement Portfolio.

On May 7, RBC Capital raised its price recommendation on Emerson Electric Co. (NYSE:EMR) to $169 from $161. It reiterated an Outperform rating following the company’s Q2 results. The firm said proactive cost management helped Emerson raise the low end of its FY26 EPS guidance, even while factoring in a one percentage point impact from continued disruption in the Middle East. The analyst also noted that the company lowered its organic sales growth guidance to 3% from 4%, according to a research note sent to investors.

During the fiscal Q2 2026 earnings call, President, CEO, and Director Surendralal Karsanbhai said Emerson delivered 5% growth in underlying orders during the quarter. He added that demand across end markets remained strong. Karsanbhai highlighted that Software & Systems orders rose 18% year over year, while Ovation orders increased 41%. He also said underlying sales growth came in at 0.5%, below expectations, because of a one-point impact tied to the Middle East conflict. Even so, the company reported an adjusted segment EBITDA margin of 27.6% and adjusted earnings per share of $1.54.The CEO added that the software annual contract value reached $1.64 billion by the end of the quarter.

Karsanbhai further stated that Emerson updated its full-year guidance to reflect the impact of the Middle East conflict. The company now expects sales growth of 4.5%, including 3% underlying growth. At the same time, Emerson raised the lower end and midpoint of its adjusted EPS outlook and now expects adjusted earnings between $6.45 and $6.55 per share.

Emerson Electric Co. (NYSE:EMR) is a global technology and software company that provides solutions across a wide range of end markets. The company operates through seven segments under two business groups: Intelligent Devices and Software and Control.

While we acknowledge the risk and potential of EMR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than EMR and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: Dividend Stock Portfolio For Retirement: Top 12 Stock Picks and 10 Best June Dividend Stocks to Buy

Disclosure: None. Follow Insider Monkey on Google News.

1281292 - 11759070 - 1