Eaton Corporation (ETN)
NYSE:ETN
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Eaton
(NYSE:ETN)
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Rating:76Outperform
Price Target:
$456.00
â–²(13.05% Upside)
Action:ReiteratedDate:03/12/26
ETN scores well primarily on strong multi-year financial performance and a positive 2026 outlook backed by record backlog and data center/aerospace demand. The score is held back by mixed near-term technical momentum and a relatively high P/E with a modest dividend yield, plus near-term margin headwinds and execution complexity from capacity ramps and portfolio changes.
Positive Factors
Record backlog & strong data center/aerospace demand
A record backlog and outsized data center and aerospace orders provide multi-quarter revenue visibility, underpin capacity investments, and de-risk near-term demand. Structural exposure to data centers and aerospace supports durable growth and higher content per project, improving long-term earnings stability.
Negative Factors
Front‑loaded margin pressure from rapid capacity ramps
Aggressive multi-site capacity expansions produce front-loaded costs and execution complexity that depress margins and can delay realization of projected returns. If ramps underperform or timing slips, expected margin and cash-flow improvements may be pushed into later periods, raising execution risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Record backlog & strong data center/aerospace demand
A record backlog and outsized data center and aerospace orders provide multi-quarter revenue visibility, underpin capacity investments, and de-risk near-term demand. Structural exposure to data centers and aerospace supports durable growth and higher content per project, improving long-term earnings stability.
Read all positive factors
Eaton (ETN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$156.36B
Dividend Yield1.29%
Average Volume (3M)2.48M
Price to Earnings (P/E)30.2
Beta (1Y)1.37
Revenue Growth8.24%
EPS Growth6.21%
CountryUS
Employees94,443
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)3.33
Shares Outstanding387,985,350
10 Day Avg. Volume1,897,336
30 Day Avg. Volume2,478,934
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 Cap1.06
Enterprise Value/Revenue6.07
Enterprise Value/Gross Profit16.14
Enterprise Value/Ebitda26.80
Forecast
1Y Price Target
$413.00Price Target Upside2.39% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)13.34
Revenue Forecast (FY)$30.64B
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 Key Performance Indicators (KPIs)
Any
Electrical Americas Revenue by Segment
Shows revenue from the Electrical Americas segment, highlighting the company's market position and growth opportunities in this region's electrical sector.
Shows revenue from the Electrical Americas segment, highlighting the company's market position and growth opportunities in this region's electrical sector.
Data provided by:
The Fly
The FlyEaton Earnings Call Summary
Earnings Call Date:Feb 03, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call emphasized strong, broad-based demand driven especially by a data center surge (orders +200% and sales >40% YoY), record backlogs and solid Q4 financial performance (adjusted EPS +18%, record margins and revenue). Management has laid out aggressive capacity expansion and an M&A/portfolio strategy (spin-off of Mobility, ~ $13B of investments) to capture generational growth. The primary negatives are near-term margin and EPS cadence pressure from front‑loaded capacity ramp costs, weakness in Vehicle and E‑Mobility (double‑digit declines), higher interest expense from acquisitions, and execution/transition risks. Overall, the sizable demand and backlog, clear strategic actions and delivered 2025 results outweigh the short‑term operational and financial headwinds.Positive Updates
Record Demand and Backlog Growth
Electrical orders accelerated (rolling 12-month) to +16% (from +7% in Q3) and backlog grew roughly 29–31% year-over-year to record levels (Electrical Americas backlog cited between ~$13B and ~$15B across slides); total backlog across segments reported at ~$19.6B. Book-to-bill for combined segments was >1.2 quarterly (≈1.1 rolling 12-month).
Negative Updates
Electrical Americas Margin Pressure from Capacity Ramp
Electrical Americas operating margin printed 29.8% in Q4 but was down ~180 bps YoY, largely due to capacity ramp costs. Management estimates the ramp-related margin hit was ~100 bps in 2025 and ~130 bps in 2026 (front‑loaded), contributing to a sizable sequential margin decline expected in Q1.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Demand and Backlog Growth
Electrical orders accelerated (rolling 12-month) to +16% (from +7% in Q3) and backlog grew roughly 29–31% year-over-year to record levels (Electrical Americas backlog cited between ~$13B and ~$15B across slides); total backlog across segments reported at ~$19.6B. Book-to-bill for combined segments was >1.2 quarterly (≈1.1 rolling 12-month).
Read all positive updates
Company Guidance
Eaton guided 2026 to organic revenue growth of 7%–9% (Electrical Americas ~10% at the midpoint), with company segment margins of 24.6%–25% (midpoint ~+30 bps vs. 2025) and adjusted EPS of $13.00–$13.50 ($13.25 midpoint, ~+10% y/y); free cash flow is expected at $3.9–$4.3 billion (midpoint ≈+14%), and the company will not repurchase shares (share count roughly flat). Q1 outlook calls for organic growth of 5%–7% and operating margins roughly in the 20.6%–22.2% range as Electrical Americas ramps capacity (ramp costs roughly +130 bps headwind to ESA margins in 2026), with EPS weighted ~44% in H1 and ~56% in H2 (higher tax rate H1 ~20–21% vs. H2 ~16–17%). Guidance is supported by record backlog (~$19.6B total; Electrical Americas ~$15.3B, Aerospace ~$4.3B) and the company’s target of ~30% Electrical Americas margin in 2026 (32% by 2030).Eaton Financial Statement Overview
Summary
Income Statement
90
Very Positive
Balance Sheet
82
Very Positive
Cash Flow
84
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 27.45B | 24.88B | 23.20B | 20.75B | 19.63B |
| Gross Profit | 10.32B | 9.50B | 8.43B | 6.91B | 6.32B |
| EBITDA | 5.95B | 5.63B | 4.96B | 3.95B | 3.96B |
| Net Income | 4.09B | 3.79B | 3.22B | 2.46B | 2.14B |
Balance Sheet | |||||
| Total Assets | 41.25B | 38.38B | 38.43B | 35.03B | 34.03B |
| Cash, Cash Equivalents and Short-Term Investments | 803.00M | 2.08B | 2.61B | 555.00M | 568.00M |
| Total Debt | 11.17B | 9.82B | 9.80B | 9.11B | 8.92B |
| Total Liabilities | 21.78B | 19.85B | 19.36B | 17.95B | 17.58B |
| Stockholders Equity | 19.43B | 18.49B | 19.04B | 17.04B | 16.41B |
Cash Flow | |||||
| Free Cash Flow | 4.47B | 3.52B | 2.87B | 1.94B | 1.59B |
| Operating Cash Flow | 4.47B | 4.33B | 3.62B | 2.53B | 2.16B |
| Investing Cash Flow | -1.10B | -271.00M | -2.58B | -1.20B | -1.76B |
| Financing Cash Flow | -3.17B | -3.94B | -871.00M | -1.34B | -535.00M |
Eaton Technical Analysis
Positive
403.36
Price Trends
367.88
Positive
349.88
Positive
357.29
Positive
Market Momentum
8.90
Negative
68.37
Neutral
95.57
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 403.36 is above the 20-day moving average (MA) of 368.94, above the 50-day MA of 367.88, and above the 200-day MA of 357.29, indicating a bullish trend. The MACD of 8.90 indicates Negative momentum. The RSI at 68.37 is Neutral, neither overbought nor oversold. The STOCH value of 95.57 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $124.23B | 32.82 | 25.65% | 0.79% | 0.22% | 26.66% | |
76 Outperform | $156.36B | 30.24 | 21.67% | 1.29% | 8.24% | 6.21% | |
72 Outperform | $77.96B | 23.48 | 95.18% | 2.43% | -0.41% | -10.88% | |
70 Outperform | $33.44B | 54.24 | 5.70% | 0.10% | 4.20% | -34.47% | |
69 Neutral | $80.84B | 30.81 | 11.60% | 1.58% | 2.97% | 18.14% | |
68 Neutral | $44.49B | 35.94 | 27.69% | 1.33% | 0.98% | -7.51% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
ETN
Eaton
403.36
129.60
47.34%
EMR
Emerson Electric Company
144.46
45.66
46.22%
ITW
Illinois Tool Works
274.51
48.72
21.58%
PH
Parker Hannifin
989.49
426.45
75.74%
ROK
Rockwell Automation
407.78
178.25
77.66%
IR
Ingersoll Rand
87.69
14.93
20.52%
Eaton Corporate Events
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, ...
Business Operations and StrategyPrivate Placements and Financing
Eaton Expands Credit Facilities With New Term Loan
Positive
Feb 6, 2026
On February 6, 2026, Eaton Corporation and related subsidiaries expanded their financial flexibility by increasing the aggregate commitments under their existing revolving credit facility from $3 billion to $4 billion under previously established ...
Business Operations and Strategy
Eaton to Spin Off Vehicle and eMobility Segments
Positive
Jan 26, 2026
On January 26, 2026, Eaton announced plans to spin off its Vehicle and eMobility segments into an independent, publicly traded Mobility Group by the end of the first quarter of 2027, subject to customary approvals. The move is designed to sharpen ...
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.