Eaton (ETN) AI Stock Analysis

• Market Cap: $132.52B
• Dividend Yield: 1.29%
• Average Volume (3M): 2.63M
• Price to Earnings (P/E): 34.1
• Beta (1Y): 1.42
• Revenue Growth: 8.24%
• EPS Growth: 6.21%
• Country: US
• Employees: 94,443
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 3.07
• Shares Outstanding: 388,400,000
• 10 Day Avg. Volume: 2,446,170
• 30 Day Avg. Volume: 2,634,533
• PEG Ratio: 1.89
• Price to Book (P/B): 7.14
• Price to Sales (P/S): 5.30
• P/FCF Ratio: 37.50
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 5.58
• Enterprise Value/Gross Profit: 14.64
• Enterprise Value/Ebitda: 24.63
• 1Y Price Target: $393.00
• Price Target Upside: 13.15% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $371.00 ▲(6.82% Upside)

The score is driven primarily by strong underlying financial performance and a constructive earnings outlook (data center and aerospace strength with reaffirmed guidance). Offsetting this, valuation is relatively expensive and the technical picture is mixed with the stock below key longer-term moving averages.

Positive Factors

Margin Strength

Sustained high gross and net margins indicate durable operational efficiency and pricing power across Eaton's electrical and aerospace franchises. Strong margins support reinvestment, acquisition integration and resilience across cycles, underpinning multi-quarter profit stability.

Cash Generation

Consistent free cash flow growth and strong conversion of earnings into cash provide durable funding for capex, dividends, and targeted M&A (e.g., Boyd acquisition). Reliable cash generation lowers financing risk and supports strategic optionality over the next several quarters.

Strategic Re-focus (Spin-off)

Announced separation refocuses the parent on higher-growth, higher-margin Electrical and Aerospace businesses, enabling tailored capital allocation and clearer operating mandates. Over time this can accelerate organic margin expansion and unlock value through more targeted management priorities.

Negative Factors

Vehicle Segment Weakness

A meaningful decline in vehicle sales and margin compression reflects structural softness in North American truck and light-vehicle markets. Prolonged weakness could drag consolidated growth and require reallocation of resources or restructuring, pressuring multi-quarter profitability.

eMobility Underperformance

Declining eMobility revenue and an operating loss signal execution and demand challenges in a strategic future-facing business. Continued underperformance may impair Eaton's EV exposure, consume cash for scale-up, and reduce the attractiveness of the unit pre- and post-separation.

CFO Departure

An impending CFO change amid major strategic moves (spin-off, acquisitions) raises short-to-medium term execution risk. Leadership turnover can slow financial planning, capital allocation and integration work, potentially complicating delivery of multi-quarter strategic objectives.

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 generates revenue through multiple key streams, primarily focusing on its electrical and industrial segments. The electrical segment includes products such as circuit breakers, power distribution equipment, and energy management solutions, which are sold to utilities, commercial enterprises, and industrial customers. The hydraulic segment offers hydraulic components and systems for construction, agriculture, and manufacturing applications. Additionally, Eaton's aerospace division provides aircraft fuel systems, hydraulic systems, and other components to both commercial and military aerospace sectors. The company also benefits from strategic partnerships with other firms for co-development of technologies and solutions, enhancing its market reach and innovation capabilities. A significant factor contributing to Eaton's earnings is its commitment to sustainability and energy efficiency, which has driven demand for its innovative products and services in an increasingly environmentally conscious market.

Eaton Financial Statement Overview

Summary

Strong profitability and steady growth, supported by healthy margins (TTM gross margin 38.18%, net margin 14.74%) and solid cash generation (TTM FCF up 6.21%, operating cash flow to net income 1.05). Balance sheet leverage appears prudent (debt-to-equity 0.59) with strong ROE (21.07%).

Income Statement

Eaton's income statement shows strong performance with consistent revenue growth over the years, culminating in a 2.47% growth in TTM. The company maintains healthy margins, with a gross profit margin of 38.18% and a net profit margin of 14.74% in TTM. The EBIT and EBITDA margins are also robust, indicating efficient operations. Overall, Eaton demonstrates solid profitability and growth trajectory.

Balance Sheet

Eaton's balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 0.59 in TTM, indicating prudent leverage. The return on equity is strong at 21.07%, showcasing effective use of equity capital. The equity ratio stands at 46.47%, suggesting a balanced capital structure. Overall, the balance sheet indicates financial stability with a focus on maintaining a healthy leverage position.

Cash Flow

Eaton's cash flow statement reveals positive trends, with a 6.21% growth in free cash flow in TTM, highlighting strong cash generation capabilities. The operating cash flow to net income ratio is 1.05, indicating efficient conversion of earnings into cash. The free cash flow to net income ratio of 0.89 reflects a solid cash flow position. Overall, Eaton's cash flow management is commendable, supporting its operational and strategic initiatives.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	26.63B	24.88B	23.20B	20.75B	19.63B	17.86B
Gross Profit	10.15B	9.50B	8.43B	6.91B	6.32B	5.45B
EBITDA	6.03B	5.63B	4.96B	3.95B	3.96B	2.78B
Net Income	3.93B	3.79B	3.22B	2.46B	2.14B	1.41B
Balance Sheet
Total Assets	40.65B	38.38B	38.43B	35.03B	34.03B	31.82B
Cash, Cash Equivalents and Short-Term Investments	565.00M	2.08B	2.61B	555.00M	568.00M	1.10B
Total Debt	11.22B	9.82B	9.80B	9.11B	8.92B	8.38B
Total Liabilities	21.77B	19.85B	19.36B	17.95B	17.58B	16.85B
Stockholders Equity	18.89B	18.49B	19.04B	17.04B	16.41B	14.93B
Cash Flow
Free Cash Flow	3.67B	3.52B	2.87B	1.94B	1.59B	2.56B
Operating Cash Flow	4.10B	4.33B	3.62B	2.53B	2.16B	2.94B
Investing Cash Flow	-1.05B	-271.00M	-2.58B	-1.20B	-1.76B	397.00M
Financing Cash Flow	-3.06B	-3.94B	-871.00M	-1.34B	-535.00M	-3.26B

Eaton Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 347.32
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 347.32 is above the 20-day moving average (MA) of 331.06, above the 50-day MA of 332.88, and above the 200-day MA of 343.40, indicating a bullish trend. The MACD of 2.12 indicates Negative momentum. The RSI at 61.24 is Neutral, neither overbought nor oversold. The STOCH value of 57.75 is Neutral, 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
PH	78 Outperform	$116.85B	32.98	27.30%	0.79%	0.22%	26.66%
EMR	76 Outperform	$82.96B	36.50	10.91%	1.58%	2.97%	18.14%
ETN	74 Outperform	$132.52B	34.12	20.69%	1.29%	8.24%	6.21%
ITW	71 Outperform	$75.05B	25.10	91.71%	2.43%	-0.41%	-10.88%
ROK	71 Outperform	$47.19B	54.76	24.24%	1.33%	0.98%	-7.51%
IR	69 Neutral	$34.09B	64.00	5.35%	0.10%	4.20%	-34.47%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Eaton Corporate Events

Eaton to Spin Off Vehicle and eMobility Segments

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 Eaton’s focus on its higher-growth, higher-margin Electrical and Aerospace businesses, which are benefiting from trends in electrification, digitalization, AI, reindustrialization, infrastructure spending and rising aerospace and defense demand, and is expected to be immediately accretive to the company’s organic growth and operating margins upon closing. The new Mobility company will position itself as a global engineered solutions partner to commercial vehicle, automotive and off-highway OEMs, leveraging leading positions in commercial truck transmissions, EV fuses and valve actuation technologies, and both entities are expected to gain more tailored capital allocation strategies, improved agility in responding to market dynamics and distinct investment profiles aimed at unlocking long-term shareholder value.

The most recent analyst rating on (ETN) stock is a Buy with a $435.00 price target. To see the full list of analyst forecasts on Eaton stock, see the ETN Stock Forecast page.

Eaton Announces CFO Departure Amidst Leadership Transition

On November 14, 2025, Eaton Corporation announced the planned departure of Olivier Leonetti, its Executive Vice President and Chief Financial Officer, effective April 1, 2026. The company is conducting a comprehensive search for his successor, reaffirming its 2025 full-year guidance. Leonetti, who joined Eaton in January 2024, will continue in his role until a successor is appointed, ensuring a smooth transition. His contributions have been acknowledged by Eaton’s CEO, Paulo Ruiz, as significant in building the company’s growth and agility.

The most recent analyst rating on (ETN) stock is a Buy with a $432.00 price target. To see the full list of analyst forecasts on Eaton stock, see the ETN Stock Forecast page.