--- title: "S&P sizes Emerson Electric's backlog $1.4 billion below its 10-K" description: "Emerson priced €750 million of 4.000% notes due 2032 on November 12, and the 'A' rating behind the deal sizes the order book at $8.2 billion, $1.4 billion below the 10-K the market screens on. Investors paying 23 times fiscal 2027 adjusted earnings have to decide which number is real." publisher: "The Inference" section: "Economy" published: 2026-11-13T20:06:53.316Z modified: 2026-11-13T20:06:53.316Z canonical: https://theinference.org/article/s-p-sizes-emerson-electric-s-backlog-1-4-billion-below-its-10-k language: en keywords: "Emerson Electric, Earnings, Industrial Automation, Credit Ratings" --- # S&P sizes Emerson Electric's backlog $1.4 billion below its 10-K > Emerson priced €750 million of 4.000% notes due 2032 on November 12, and the 'A' rating behind the deal sizes the order book at $8.2 billion, $1.4 billion below the 10-K the market screens on. Investors paying 23 times fiscal 2027 adjusted earnings have to decide which number is real. [Emerson Electric](https://theinference.org/markets/companies/emerson-electric) closed €750 million of euro debt today at a 4% coupon, and the credit rating behind the deal describes an order book $1.4 billion smaller than the one in Emerson's own annual filing. One of those two documents is measuring the asset the whole investment case rests on, and investors need to know which. [We wrote on November 4](https://theinference.org/article/emerson-electric-beat-orders-rose-14-and-the-stock-fell-5-6-as-its-2027-plan-spends-all-free-cash-flow) that Emerson beat, orders rose 14% and the stock fell as its fiscal 2027 plan spends all free cash flow. What is new since: the 10-K on November 9, [S&P's rating note on November 10](https://www.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3657212), and the pricing 8-K on November 12. The sales, earnings and guidance figures below were already in that coverage; the coupon and the backlog discrepancy are what the last three days added. ## The new euro notes cost more than the euro debt Emerson already owes [The 8-K filed November 12](https://www.sec.gov/Archives/edgar/data/32604/000114036126043442/0001140361-26-043442-index.htm) shows Emerson priced €750 million of 4.000% senior unsecured notes due 2032 at 99.639% to the public, with net proceeds of about €744.5 million, or $830 million, going mainly to repay commercial paper, its short-term borrowings [1]. [S&P Global Ratings](https://theinference.org/markets/companies/s-p-global-ratings) rated the notes 'A', in line with its rating on the company [2]. *Chart: **The AspenTech buyout added $6.7 billion of debt, and it is barely down since** Emerson's total debt at the end of each quarter from late 2023 to September 2026, showing a jump in the quarter the AspenTech buyout closed* *Billions of US dollars, total debt at quarter end, labelled by calendar quarter. Emerson's fiscal year ends September 30, and its fiscal first quarter ends December 31. Source: [6], Emerson Electric quarterly figures from its SEC filings. [6]* Like-for-like, the money got dearer. In March 2025 Emerson issued euro notes at 3.0% due 2031 and 3.5% due 2037 [3]. Today's euro money carries a full point above the lower of those. Net interest expense has climbed to $334 million in fiscal 2026 from $237 million and $175 million the two years before, as debt from the buyout of AspenTech, the software company Emerson took private, works through the accounts [3]. Refinancing short-term paper at 4% does not reverse that direction [3]. *Chart: **Net interest expense has nearly doubled in two fiscal years** Emerson's net interest expense in fiscal 2024, 2025 and 2026* *Millions of US dollars, net interest expense by fiscal year ended September 30, from the Form 10-K. Sources: [3]. [3]* ## The order book carries two different numbers [Emerson's 10-K](https://www.marketscreener.com/news/emerson-electric-annual-report-for-fiscal-year-ending-september-30-2026-form-10-k-ce785fd3d088f422) reports a consolidated backlog of $9.6 billion at September 30, up from $8.6 billion a year earlier, with about 70% converting to revenue within 12 months [4]. S&P, one day after the 10-K, put the backlog at $8.2 billion, called it an 11% increase, and expects 70% to 75% converted as leverage holds near 2x adjusted debt to EBITDA in fiscal 2027 [2]. Against Emerson's own year-ago base, $8.2 billion is a decline, not an 11% rise. S&P is measuring something else and has not said what. The two documents disagree by $1.4 billion. *Chart: **S&P sizes Emerson's backlog $1.4 billion below the 10-K figure** Backlog figures from Emerson's fiscal 2026 10-K and S&P's rating note, against the prior-year base* *Billions of US dollars, consolidated order backlog at fiscal year end. S&P's year-ago figure is implied by its reported $8.2 billion and 11% increase, and is an estimate. Sources: [2], [4]. [2][4]* The buy case rests on that order book converting at a 53.4% gross margin, with adjusted earnings guided to about $7.25 a share for fiscal 2027, figures already reported last week [3]. The sell case, as DA Davidson, an investment-research firm, signaled with a Neutral rating and a $160 target against a $167 close, is that the order flow is already in the price [5]. The gap is unresolved. Until S&P explains its number, screen on the filing Emerson signed: the $9.6 billion backlog and the 4% cost of the money that carries it. ## Takeaway S&P's rating note sizes Emerson's backlog at $8.2 billion, $1.4 billion below the 10-K the stock is valued on, and the euro money the company just raised costs a full point more than its last euro issue. ## Sources 1. [SEC EDGAR, Emerson Electric Co. Form 8-K, 12 November 2026](https://www.sec.gov/Archives/edgar/data/32604/000114036126043442/0001140361-26-043442-index.htm) 2. [S&P Global Ratings, Emerson Electric Co.'s Proposed Senior Unsecured Notes Rated 'A', 10 November 2026](https://www.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3657212) 3. [Emerson Electric Form 10-K, fiscal year ended 30 September 2026, via MarketScreener, 9 November 2026](https://www.marketscreener.com/news/emerson-electric-annual-report-for-fiscal-year-ending-september-30-2026-form-10-k-ce785fd3d088f422) 4. [Screw Street, Emerson Electric backlog rises to $9.6 billion as of September 30, 2026, 9 November 2026](https://screwstreet.com/news/emerson-electric-earnings-2026-11-09) 5. [TradingView/Benzinga, DA Davidson maintains Emerson Electric at Neutral, raises price target to $160 from $155, November 2026](https://www.tradingview.com/news/tradingview:6881106cc5652:0-da-davidson-maintains-emerson-electric-at-neutral-raises-price-target-to-160-from-155/) 6. [Emerson Electric, quarterly figures from its SEC filings, retrieved 13 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000032604) --- S&P sizes Emerson Electric's backlog $1.4 billion below its 10-K — The Inference. 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