Eaton Corporation (ETN)
NYSE:ETN
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Eaton
(NYSE:ETN)
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Rating:73Outperform
Price Target:
$448.00
â–²(10.29% Upside)
Action:Reiterated
Date:05/09/26
The score is driven primarily by strong underlying fundamentals (profitability and cash conversion) and an upbeat earnings outlook with raised growth/EPS guidance and strong data-center backlog. Offsetting factors are the step-up in leverage and a high valuation (P/E ~40), while technicals are constructive longer-term but neutral in the near term.
Positive Factors
Cash generation
Consistently high free cash flow nearly equal to reported net income signals strong earnings quality and conversion. Durable FCF supports reinvestment, capacity expansion, M&A funding and debt reduction, increasing financial optionality across business cycles over the next 2–6 months and beyond.
Negative Factors
Leverage increase
A material step-up in leverage reduces balance-sheet flexibility and raises financial risk if demand softens. Even with strong FCF, lower operating-cash-flow coverage of total debt (~0.40) means adverse cycles or higher rates could constrain capital allocation and slow deleveraging for several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Consistently high free cash flow nearly equal to reported net income signals strong earnings quality and conversion. Durable FCF supports reinvestment, capacity expansion, M&A funding and debt reduction, increasing financial optionality across business cycles over the next 2–6 months and beyond.
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
$151.96B
Dividend Yield1.29%
Average Volume (3M)2.73M
Price to Earnings (P/E)40.1
Beta (1Y)1.26
Revenue Growth12.68%
EPS Growth3.12%
CountryUS
Employees94,443
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)10.26
Shares Outstanding388,300,000
10 Day Avg. Volume2,704,554
30 Day Avg. Volume2,732,450
Financial Highlights & Ratios
PEG Ratio3.04
Price to Book (P/B)6.37
Price to Sales (P/S)4.50
P/FCF Ratio27.65
Enterprise Value/Market Cap1.14
Enterprise Value/Revenue6.07
Enterprise Value/Gross Profit16.46
Enterprise Value/Ebitda29.27
Forecast
1Y Price Target
$459.09Price Target Upside13.02% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering14
EPS Forecast (FY)13.34
Revenue Forecast (FY)$32.12B
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,...
How the Company Makes Money
Eaton makes money primarily by selling power management products, systems, and services across several operating segments. A major revenue stream comes from its Electrical businesses, which sell equipment used to distribute, protect, and manage el...
Eaton Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call presented multiple strong operational and financial positives — record revenue and segment profit, robust organic growth, exceptional data center order momentum, large backlog growth, significant free cash flow improvement, and accretive strategic acquisitions and partnerships. The primary negatives were transitory: Electrical Americas margin pressure from ramp and input-cost timing, a deliberate mobility carve-out causing a near-term sales decline, and near-term acquisition integration and technology commercialization timing. Management provided clear actions (price increases, factory ramping, ongoing CapEx) and quantified an expected sequential margin recovery (Electrical Americas +150 bps Q1→Q2) and reiterated longer-term margin targets, leading to confidence that the negatives are temporary while the growth runway is durable.Positive Updates
Record Revenue and Profitability
Recorded Q1 revenue of $7.5 billion (Q1 record) and Q1 segment operating profit of $1.7 billion (Q1 record); reported adjusted EPS of $2.81 (Q1 record), $0.06 above the midpoint of guidance.
Negative Updates
Electrical Americas Margin Pressure in Q1
Electrical Americas margins underperformed in Q1 (segment operating margin 25.6% in the business) leading to a company-wide segment margin guidance range (24.1%–24.5%) that is ~50 basis points lower than prior guide; management attributes the hit mainly to timing effects and one-time ramp costs.
Read all updates
Q1-2026 Updates
Positive
Negative
Record Revenue and Profitability
Recorded Q1 revenue of $7.5 billion (Q1 record) and Q1 segment operating profit of $1.7 billion (Q1 record); reported adjusted EPS of $2.81 (Q1 record), $0.06 above the midpoint of guidance.
Read all positive updates
Company Guidance
Eaton raised its 2026 outlook: organic revenue growth is now guided to 9–11% (midpoint 10%, up 200 bps), adjusted EPS to $13.05–$13.50 (midpoint $13.28) — reflecting the Q1 beat and Boyd dilution — and full‑year segment margin guidance to 24.1–24.5% (50 bps below prior guide). Management reiterated roughly $4.4 billion of full‑year segment profit in dollars, reaffirmed cash‑flow expectations and provided Q2 guidance, noting Q1 free cash flow was up 245% YoY and Q1 adjusted EPS was a record $2.81 (beat midpoint by $0.06) on record revenue of $7.5 billion and Q1 segment operating profit of $1.7 billion (Q1 margins 22.7%). They expect Electrical Americas and Electrical Global to be ~300 bps higher at the midpoint versus prior guide, Electrical Americas to improve ~150 bps from Q1→Q2 and to exit 2026 north of 30% (aiming for 32% by 2030), and called out data‑center backlog at 228 GW (12 years at 2025 build rates) with 32 GW under construction in the U.S. (70% AI); Boyd Thermal is on track for ~$1.7 billion+ revenue in 2026 (about $1.4 billion included in Eaton results).Eaton Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
63
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 28.52B | 27.45B | 24.88B | 23.20B | 20.75B | 19.63B |
| Gross Profit | 10.52B | 10.32B | 9.50B | 8.43B | 6.91B | 6.32B |
| EBITDA | 5.92B | 5.95B | 5.63B | 4.96B | 3.95B | 3.96B |
| Net Income | 3.99B | 4.09B | 3.79B | 3.22B | 2.46B | 2.14B |
Balance Sheet | ||||||
| Total Assets | 55.09B | 41.25B | 38.38B | 38.43B | 35.03B | 34.03B |
| Cash, Cash Equivalents and Short-Term Investments | 751.00M | 803.00M | 2.08B | 2.61B | 555.00M | 568.00M |
| Total Debt | 21.83B | 11.17B | 9.82B | 9.80B | 9.11B | 8.92B |
| Total Liabilities | 35.32B | 21.78B | 19.85B | 19.36B | 17.95B | 17.58B |
| Stockholders Equity | 19.77B | 19.43B | 18.49B | 19.04B | 17.04B | 16.41B |
Cash Flow | ||||||
| Free Cash Flow | 4.70B | 4.47B | 3.52B | 2.87B | 1.94B | 1.59B |
| Operating Cash Flow | 4.74B | 4.47B | 4.33B | 3.62B | 2.53B | 2.16B |
| Investing Cash Flow | -13.71B | -1.10B | -271.00M | -2.58B | -1.20B | -1.76B |
| Financing Cash Flow | 7.87B | -3.17B | -3.94B | -871.00M | -1.34B | -535.00M |
Eaton Technical Analysis
Positive
406.21
Price Trends
389.28
Positive
370.29
Positive
362.10
Positive
Market Momentum
-3.27
Positive
47.67
Neutral
32.58
Neutral
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 406.21 is above the 20-day moving average (MA) of 404.28, above the 50-day MA of 389.28, and above the 200-day MA of 362.10, indicating a neutral trend. The MACD of -3.27 indicates Positive momentum. The RSI at 47.67 is Neutral, neither overbought nor oversold. The STOCH value of 32.58 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $109.31B | 31.24 | 24.69% | 0.79% | 6.03% | 4.26% | |
77 Outperform | $50.33B | 28.74 | 30.25% | 1.33% | 10.45% | 21.30% | |
73 Outperform | $151.96B | 40.08 | 20.81% | 1.29% | 12.68% | 3.12% | |
71 Outperform | $76.41B | 29.72 | 12.11% | 1.58% | 4.03% | 3.51% | |
70 Outperform | $72.56B | 24.43 | 97.38% | 2.43% | 2.90% | -5.25% | |
67 Neutral | $27.75B | 40.88 | 5.80% | 0.10% | 6.86% | -26.67% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
ETN
Eaton
403.13
78.72
24.26%
EMR
Emerson Electric Company
140.97
21.94
18.43%
ITW
Illinois Tool Works
250.41
9.81
4.08%
PH
Parker Hannifin
868.03
202.90
30.51%
ROK
Rockwell Automation
456.30
147.58
47.80%
IR
Ingersoll Rand
72.43
-10.08
-12.21%
Eaton Corporate Events
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Eaton Shareholders Approve Directors, Pay and Capital Authorities
Positive
Apr 23, 2026
At Eaton’s Annual General Meeting of Shareholders held on April 22, 2026, investors elected 11 director nominees to serve until the next annual meeting, reaffirming the current board’s composition and governance structure. Shareholders...
Business Operations and StrategyPrivate Placements and Financing
Eaton Ends Undrawn $8 Billion Term Credit Facility
Positive
Mar 11, 2026
On March 6, 2026, Eaton Corporation terminated an $8 billion term credit agreement that had been entered into on February 6, 2026, with various company subsidiaries, a bank syndicate as lenders, and Citibank N.A. as administrative agent. No loans ...
Business Operations and StrategyExecutive/Board Changes
Eaton Sets 2026 Executive Incentive Compensation Performance Criteria
Neutral
Mar 2, 2026
On February 25, 2026, Eaton’s board Compensation and Organization Committee set the 2026 corporate performance criteria that will govern executive and salaried employee incentive payouts under its Executive Incentive Compensation Plan. The p...
Business Operations and StrategyExecutive/Board Changes
Eaton Appoints David Foster as New Chief Financial Officer
Positive
Mar 2, 2026
Eaton announced on March 2, 2026 that David B. Foster has been appointed executive vice president and chief financial officer, effective the same day, following a planned transition from outgoing CFO Olivier Leonetti, who will depart on March 13, ...
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.