Ahead of the Bell: Emerson downgraded to 'Neutral'

Nicole M. Parent said in a client note that Emerson, which offers electrical products and services, remains one of the best managed companies in her coverage group. But shares of the St. Louis company trade at higher-than-normal premium to similar large-cap peers, such as General Electric Co., Honeywell International Inc. and 3M Co.

This gap is likely due to investor aversion to companies with financial exposure--such as GE--or aerospace exposure--such as Honeywell, Parent said. But it will probably narrow in the near term.

Parent downgraded the stock from "Outperform." She cut her price target to $56 from $60, implying she expects shares to gain 4 percent over Monday's close of $53.63.

Shares of Emerson have traded between $43.18 and $59.05 in the last 52 weeks.