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Eaton
(NYSE:ETN)
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Rating:76Outperform
Price Target:
$469.00
â–²(16.07% Upside)
Action:Reiterated
Date:08/03/26
The score is driven primarily by strong fundamentals and a very constructive earnings update (raised guidance, record results, strong backlog and margin progress). Technicals add support with the stock trading above key moving averages. The main restraint is valuation (high P/E and modest yield), alongside elevated financial risk from the recent leverage increase and some near-term margin/earnings pressure versus the last annual period.
Positive Factors
Raised guidance & record Q2 results
Management's guidance raise after a record quarter shows durable demand and repeatable execution across core businesses. Higher organic growth and EPS outlook enhance multi‑period revenue visibility, support reinvestment and FCF generation, and indicate scalable operations and margin leverage.
Negative Factors
Material rise in leverage
Leverage rising to near parity with equity increases financial vulnerability to earnings volatility and interest rate moves. Although cash flow has improved, coverage ratios have declined versus prior years, reducing flexibility for buybacks, M&A or downturns and elevating refinancing and covenant risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Raised guidance & record Q2 results
Management's guidance raise after a record quarter shows durable demand and repeatable execution across core businesses. Higher organic growth and EPS outlook enhance multi‑period revenue visibility, support reinvestment and FCF generation, and indicate scalable operations and margin leverage.
Read all positive factors
Eaton Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down total revenue by segment, providing a comprehensive view of Eaton's diverse business operations and strategic focus areas.
Breaks down total revenue by segment, providing a comprehensive view of Eaton's diverse business operations and strategic focus areas.
Data provided by:
The Fly
The FlyEaton (ETN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$161.22B
Dividend Yield1.03%
Average Volume (3M)2.19M
Price to Earnings (P/E)42.1
Beta (1Y)1.24
Revenue Growth15.53%
EPS Growth-1.21%
CountryUS
Employees97,303
SectorIndustrials
Sector Strength72
IndustryElectrical Equipment & Parts
Share Statistics
EPS (TTM)9.86
Shares Outstanding388,300,000
10 Day Avg. Volume2,007,004
30 Day Avg. Volume2,186,392
Financial Highlights & Ratios
PEG Ratio3.05
Price to Book (P/B)6.37
Price to Sales (P/S)4.50
P/FCF Ratio34.80
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$487.43Price Target Upside20.63% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
EPS Forecast (FY)13.48
Revenue Forecast (FY)$32.71B
Eaton Business Overview & Revenue Model
Company Description
Eaton Corp. Plc is a power management company, which provides energy-efficient solutions for electrical, hydraulic, and mechanical power. It operates through the following segments: Electrical Americas and Electrical Global; Aerospace, Vehicle, an...
How the Company Makes Money
Eaton primarily makes money by selling engineered products, systems, and solutions used to manage, distribute, protect, and control electrical power, along with aerospace components and systems. Revenue is generated mainly through: (1) Product and...
Eaton Earnings Call Summary
Earnings Call Date:Jul 31, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The call conveyed strong, broad-based operational momentum: record revenue and EPS, significant organic growth (notably in electrical businesses and data centers), raised guidance, improved margins and cash flow, and successful integration of acquisitions like Boyd. Challenges were limited and largely transient (temporary price/cost pressure, prior ramp disruption) or small in magnitude (Mobility softness, IEEPA refund < $3M). Given the number and magnitude of positive developments versus relatively modest and manageable negatives, the overall tone is constructive and confidence-inspiring.Positive Updates
Record Revenue and EPS Beat
Reported record Q2 revenue of $8.5 billion (21% total growth, 14% organic) and adjusted EPS of $3.15, which exceeded guidance by $0.10 at the midpoint and was a Q2 record; H1 adjusted EPS of $5.96 also a first-half record.
Negative Updates
Mobility Organic Decline
Mobility reported a 2% organic sales decline in the quarter (offset by FX); management attributed some of the decline to the intentional exit of low-margin business, though Mobility margins increased ~90 basis points year-over-year.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Revenue and EPS Beat
Reported record Q2 revenue of $8.5 billion (21% total growth, 14% organic) and adjusted EPS of $3.15, which exceeded guidance by $0.10 at the midpoint and was a Q2 record; H1 adjusted EPS of $5.96 also a first-half record.
Read all positive updates
Company Guidance
Eaton raised its 2026 outlook after a strong Q2: full‑year organic growth is now expected at 11–13% (midpoint 12%, +200 bps), adjusted EPS $13.40–$13.60 (midpoint $13.50, +$0.22), with Electrical Americas organic growth guided to a 15% midpoint (+200 bps) and Electrical Global to a 12% midpoint (+450 bps); Boyd’s full‑year revenue was increased to $1.8B (about $1.5B in Eaton’s books). Q2 was a record quarter with $8.5B revenue (total growth 21%, organic 14%), adjusted EPS $3.15 (Q2 record; H1 $5.96), operating cash flow +23% YoY and a $0.25 segment profit beat versus guidance (IEEPA refund impact < $3M, < $0.01 EPS). Key operational metrics supporting the raise include Electrical Americas margin 27.5% (+190 bps QoQ), combined Electrical margin 24.5% (+110 bps QoQ), Aerospace margin 22.8% (+60 bps), strong order/backlog momentum (company book‑to‑bill 1.2; Americas 1.3; Electrical orders up ~38% on a 12‑month basis; total electrical backlog +43% YoY; Electrical Global backlog +103% including Boyd, organic +54%) and a 307 GW U.S. data‑center backlog (~15 years at 2025 build rates).Eaton Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
62
Positive
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 30.02B | 27.45B | 24.88B | 23.20B | 20.75B | 19.63B |
| Gross Profit | 10.78B | 10.32B | 9.50B | 8.43B | 6.91B | 6.32B |
| EBITDA | 6.06B | 5.95B | 5.63B | 4.96B | 3.95B | 3.96B |
| Net Income | 3.83B | 4.09B | 3.79B | 3.22B | 2.46B | 2.14B |
Balance Sheet | ||||||
| Total Assets | 56.18B | 41.25B | 38.38B | 38.43B | 35.03B | 34.03B |
| Cash, Cash Equivalents and Short-Term Investments | 695.00M | 803.00M | 2.08B | 2.61B | 555.00M | 568.00M |
| Total Debt | 21.33B | 11.17B | 9.82B | 9.80B | 9.11B | 8.92B |
| Total Liabilities | 35.88B | 21.78B | 19.85B | 19.36B | 17.95B | 17.58B |
| Stockholders Equity | 20.25B | 19.43B | 18.49B | 19.04B | 17.04B | 16.41B |
Cash Flow | ||||||
| Free Cash Flow | 4.50B | 3.55B | 3.52B | 2.87B | 1.94B | 1.59B |
| Operating Cash Flow | 4.95B | 4.47B | 4.33B | 3.62B | 2.53B | 2.16B |
| Investing Cash Flow | -12.27B | -1.10B | -271.00M | -2.58B | -1.20B | -1.76B |
| Financing Cash Flow | 7.40B | -3.17B | -3.94B | -871.00M | -1.34B | -535.00M |
Eaton Technical Analysis
Positive
404.07
Price Trends
406.99
Positive
398.13
Positive
373.99
Positive
Market Momentum
6.10
Negative
62.45
Neutral
95.05
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ETN, the sentiment is Positive. The current price of 404.07 is below the 20-day moving average (MA) of 407.51, below the 50-day MA of 406.99, and above the 200-day MA of 373.99, indicating a bullish trend. The MACD of 6.10 indicates Negative momentum. The RSI at 62.45 is Neutral, neither overbought nor oversold. The STOCH value of 95.05 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ETN.
Eaton Risk Analysis
Eaton disclosed 19 risk factors in its most recent earnings report. Eaton reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Eaton Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $123.13B | 35.52 | 24.69% | 0.75% | 6.03% | 4.26% | |
76 Outperform | $161.22B | 42.11 | 19.56% | 1.06% | 15.53% | -1.21% | |
76 Outperform | $83.91B | 34.44 | 12.68% | 1.48% | 4.03% | 3.51% | |
76 Outperform | $82.56B | 25.94 | 101.74% | 2.28% | 4.30% | -3.22% | |
76 Outperform | $32.63B | 34.03 | 9.46% | 0.09% | 7.85% | 88.74% | |
68 Neutral | $53.42B | 49.70 | 33.32% | 1.18% | 10.45% | 21.30% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
ETN
Eaton
447.28
90.20
25.26%
EMR
Emerson Electric Company
162.47
31.77
24.30%
ITW
Illinois Tool Works
297.32
46.87
18.71%
PH
Parker Hannifin
996.90
277.79
38.63%
ROK
Rockwell Automation
450.05
122.10
37.23%
IR
Ingersoll Rand
90.00
13.80
18.11%
Eaton Corporate Events
Business Operations and StrategyM&A Transactions
Eaton to Spin Off Mobility Group in Dana Merger
Positive
Jun 11, 2026
Eaton, the intelligent power management group, is accelerating its portfolio shift toward higher-growth, higher-margin electrical and aerospace businesses that are tied to megatrends such as electrification, AI-driven data centers, infrastructure ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.