Eaton (ETN) AI Stock Analysis

• Market Cap: $118.18B
• Dividend Yield: 1.31%
• Average Volume (3M): 3.51M
• Price to Earnings (P/E): 31.8
• Beta (1Y): 1.41
• Revenue Growth: 7.25%
• EPS Growth: 18.36%
• Country: US
• Employees: 94,443
• Sector: Industrials
• Sector Strength: 78
• Industry: Industrial - Machinery
• EPS (TTM): 9.50
• Shares Outstanding: 391,769,380
• 10 Day Avg. Volume: 2,664,028
• 30 Day Avg. Volume: 3,514,818
• PEG Ratio: 1.73
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.18
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 14.67
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $337.67
• Price Target Upside: 11.94% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

Eaton's overall stock score reflects its robust financial performance and positive earnings guidance, which are slightly tempered by high valuation metrics and mixed technical signals. Strong growth in key segments like Electrical and Data Centers supports the company's positive outlook, though challenges in Aerospace and Vehicle segments present risks.

Positive Factors

Aerospace Market

The aerospace market is expected to continue driving long-term growth and margin for Eaton, with strong backlog and demand.

Financial Performance

Eaton raised their long-term targets for organic growth and margin, indicating confidence in future performance.

Negative Factors

BEV Adoption Rates

BEV adoption rates tapering may lead investors to question the relevancy of ETN's vehicle operations to the longer-term core growth focus areas.

Stock Performance

Shares of ETN are down ~15% relative to the S&P 500 to start 2025.

Eaton Business Overview & Revenue Model

Company Description

Eaton Corporation plc operates as a power management company worldwide. The company's Electrical Americas and Electrical Global segment provides electrical components, industrial components, power distribution and assemblies, residential products, single and three phase power quality and connectivity products, wiring devices, circuit protection products, utility power distribution products, power reliability equipment, and services, as well as hazardous duty electrical equipment, emergency lighting, fire detection, explosion-proof instrumentation, and structural support systems. Its Aerospace segment offers pumps, motors, hydraulic power units, hoses and fittings, and electro-hydraulic pumps; valves, cylinders, electronic controls, electromechanical actuators, sensors, aircraft flap and slat systems, and nose wheel steering systems; hose, thermoplastic tubing products, fittings, adapters, couplings, and sealing and ducting products; air-to-air refueling systems, fuel pumps, fuel inerting products, sensors, valves, and adapters and regulators; oxygen generation system, payload carriages, and thermal management products; and wiring connectors and cables, as well as hydraulic and bag filters, strainers and cartridges, and golf grips for manufacturers of commercial and military aircraft, and related after-market customers, as well as industrial applications. The company's Vehicle segment offers transmissions, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, locking and limited slip differentials, transmission controls, and fuel vapor components for the vehicle industry. Its eMobility segment provides voltage inverters, converters, fuses, onboard chargers, circuit protection units, vehicle controls, power distribution systems, fuel tank isolation valves, and commercial vehicle hybrid systems. Eaton Corporation plc was founded in 1911 and is based in Dublin, Ireland.

How the Company Makes Money

Eaton makes money through the sale of its diverse range of products and services across its key business segments. The Electrical sector, comprising electrical products and systems, is a major revenue driver, offering solutions like circuit breakers, power distribution assemblies, and uninterruptible power systems. The Aerospace segment provides products and services for commercial and military aviation, including hydraulic systems, fuel components, and motion control systems. In the Vehicle segment, Eaton generates revenue from products such as transmissions, clutches, and powertrain systems for the automotive industry. Additionally, Eaton's eMobility segment focuses on electric vehicle components and systems, catering to the growing demand for sustainable transportation. The company's revenue is also supported by strategic partnerships and global distribution networks, enabling it to reach a wide customer base across various industries.

Eaton Financial Statement Overview

Summary

Eaton demonstrates strong financial health with consistent revenue and profitability growth, maintaining a stable balance sheet and effective cash flow management. Potential risks include monitoring increasing liabilities and ensuring consistent cash flow growth amid fluctuating capital expenditures.

Income Statement

Eaton exhibits strong financial performance characterized by steady revenue growth and robust profitability margins. The revenue growth rate from 2019 to 2024 is impressive, indicating a solid upward trajectory. Gross profit margins remain high, and both EBIT and EBITDA margins demonstrate efficient cost management and operational effectiveness. The net profit margin is consistently robust, reflecting strong bottom-line management.

Balance Sheet

Eaton maintains a strong balance sheet, highlighted by a healthy equity ratio, indicating financial stability and a solid asset base. The debt-to-equity ratio suggests moderate leverage, which is manageable given the company's size and industry. However, there is a slight increase in total liabilities, which should be monitored to prevent future financial strain. Return on Equity (ROE) shows effective utilization of equity to generate profits.

Cash Flow

Eaton's cash flow management is solid, with positive free cash flow over the years, although the growth rate in free cash flow has fluctuated. The operating cash flow to net income ratio suggests efficient conversion of net income into cash, but the lack of recent operating cash flow data limits a comprehensive analysis. The company should focus on consistent capital expenditure management to ensure sustainable cash flow health.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
24.88B	23.20B	20.75B	19.63B	17.86B
	Gross Profit
9.50B	8.43B	6.89B	6.33B	5.45B
	EBIT
4.63B	3.88B	2.08B	1.50B	863.00M
	EBITDA
5.55B	4.90B	3.03B	2.42B	1.67B
	Net Income Common Stockholders
3.79B	3.22B	2.46B	2.14B	1.41B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.08B	2.61B	555.00M	568.00M	1.10B
	Total Assets
38.38B	38.43B	35.03B	34.03B	31.82B
	Total Debt
9.82B	9.80B	9.11B	8.92B	8.38B
	Net Debt
9.27B	9.31B	8.82B	8.62B	7.95B
	Total Liabilities
19.85B	19.36B	17.95B	17.58B	16.85B
	Stockholders Equity
18.49B	19.04B	17.04B	16.41B	14.93B
Cash Flow		Free Cash Flow
3.52B	2.87B	1.94B	1.59B	2.56B
	Operating Cash Flow
4.33B	3.62B	2.53B	2.16B	2.94B
	Investing Cash Flow
-271.00M	-2.58B	-1.20B	-1.76B	397.00M
	Financing Cash Flow
-3.94B	-871.00M	-1.34B	-535.00M	-3.26B

Eaton Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 301.66
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 301.66 is above the 20-day moving average (MA) of 274.40, above the 50-day MA of 282.53, and below the 200-day MA of 316.29, indicating a neutral trend. The MACD of 3.01 indicates Negative momentum. The RSI at 61.75 is Neutral, neither overbought nor oversold. The STOCH value of 94.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ETN.

Eaton Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ETN	76 Outperform	$118.18B	31.76	20.23%	1.31%	7.25%	18.36%
PH	76 Outperform	$77.91B	25.03	27.16%	1.08%	0.41%	19.76%
ROP	75 Outperform	$59.95B	40.22	8.09%	0.56%	13.34%	1.98%
ITW	74 Outperform	$70.18B	20.43	107.62%	2.46%	-1.30%	20.26%
EMR	70 Outperform	$59.67B	25.16	9.66%	2.00%	10.29%	22.72%
ROK	67 Neutral	$28.18B	31.01	26.22%	2.07%	-11.28%	-23.69%
Sector *	63 Neutral	$4.21B	11.55	5.28%	250.72%	4.13%	-9.42%

Eaton Corporate Events

Eaton Appoints P&G CFO Andre Schulten to Board

Eaton Corporation has expanded its board by appointing Andre Schulten, the CFO of Procter & Gamble, highlighting its strategic focus on leveraging global financial expertise. Schulten’s election is poised to enhance Eaton’s initiatives in power management and sustainability, aligning with its growth trends in electrification and digitalization. His extensive international experience in finance and leadership further strengthens Eaton’s commitment to innovation and sustainability in managing power solutions across diverse markets.