Emerson's stock price rose 0.95% to $67.03 after RBC boosted its rating on the company's shares to buy from hold on the belief it may be headed for a profitable breakup, according to published reports.
RBC analyst Deane Dray argued the "stars are aligning" behind a breakup scenario, with Emerson CEO David Farr nearing retirement and activist investors waiting in the wings, Bloomberg reported.
The RBC analyst wrote he is "increasingly intrigued" by the idea that Farr "may orchestrate a breakup prior to his FY2021-FY2022 retirement."
RBC has boosted its price target to $77 a share from $65 previously, with the report detailing a possible breakup scenario involving EMR's automation solutions unit and its commercial and residential solutions business.
Hedge fund D.E. Shaw & Co. is buying up shares of Emerson as part of a plan to push to push for a potential break up of the industrial giant, which manufacturers thousands of products, from industrial valves to light and climate control systems, Reuters reported last week, citing sources familiar with the fund's plans.
A spokesperson for Emerson declined comment.
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