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Eaton Corporation (ETN)
:ETN
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Eaton (ETN) AI Stock Analysis

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ETN

Eaton

(NYSE:ETN)

Rating:76Outperform
Price Target:
$403.00
▲(13.06% Upside)
Eaton's overall stock score reflects its strong financial performance and positive earnings outlook, driven by growth in key segments like Electrical Americas and Aerospace. The technical analysis presents a mixed picture, with short-term weakness but long-term strength. Valuation concerns due to a high P/E ratio and modest dividend yield slightly dampen the score. The raised guidance and strategic initiatives provide confidence in Eaton's future growth prospects.
Positive Factors
Data Center Growth
ETN is expected to continue leading the industry, with Data Center revenue up by approximately 50% and an 18% increase in the negotiation pipeline quarter-over-quarter.
Profit Growth Potential
ETN has substantial potential for profit growth with a projected tenfold profit increase on a reshored unit of capital expenditure.
Reshoring Initiative
The US Reshoring initiative is progressing faster than anticipated, positioning ETN as a top beneficiary of this trend.
Negative Factors
BEV Adoption Concerns
With BEV adoption rates tapering, investors may question the relevancy of ETN's Vehicle and eMobility operations to its longer-term growth focus.
Margin Pressure
Margins are expected to see pressure from dollar for dollar pricing actions, with Q2 expected to see most of the impact due to timing lag.
Order Decline
Eaton's 1Q25 orders are expected to be down year-over-year due to challenging comparisons from a large order in the previous year, not due to a slowdown in the market.

Eaton (ETN) vs. SPDR S&P 500 ETF (SPY)

Eaton Business Overview & Revenue Model

Company DescriptionEaton 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 MoneyEaton makes money through its diverse range of products and services across its core business segments. The Electrical Products and Electrical Systems and Services segments, which include products like circuit breakers, switchgear, UPS systems, and power distribution units, generate revenue by providing solutions for electrical power distribution and control. The Aerospace segment earns revenue by supplying hydraulic, fuel, and pneumatic systems for commercial and military aircraft, leveraging long-term contracts with major aerospace manufacturers. The Hydraulics segment contributes through the sale of components and systems for industrial and mobile equipment. Meanwhile, the Vehicle segment generates income from drivetrain and powertrain systems and components for automotive and commercial vehicles. Eaton also benefits from strategic partnerships and acquisitions that expand its market reach and product offerings, thereby enhancing its revenue potential.

Eaton Key Performance Indicators (KPIs)

Any
Any
Electrical Americas Revenue by Segment
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.
Chart InsightsEaton's Electrical Americas segment shows robust growth, particularly in the Systems category, reflecting strong demand and strategic positioning in key markets like data centers. The latest earnings call underscores this momentum, with record EPS and revenue growth driven by a 9% organic sales increase. Despite challenges in other segments, Eaton's focus on expanding its data center capabilities and a solid order backlog positions it well for continued success. Investors should note the company's resilience amid global trade uncertainties and its strategic emphasis on high-growth sectors.
Data provided by:Main Street Data

Eaton Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q2-2025)
|
% Change Since: -7.36%|
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue and earnings growth, driven by the robust performance of the Electrical Americas and Aerospace segments, and strategic moves in the data center market. However, challenges remain in the Vehicle and eMobility segments. Despite these challenges, the overall outlook remains positive with raised guidance for 2025.
Q2-2025 Updates
Positive Updates
Record Revenue and Earnings Growth
Eaton reported record quarterly revenue of $7 billion, with adjusted EPS increasing by 8% compared to Q2 2024, reaching $2.95.
Strong Performance in Electrical Americas
Electrical Americas segment showed organic sales growth of 12%, with a significant 50% increase in data center sales.
Data Center Market Surge
Orders in the data center market jumped approximately 55%, with sales up 50% compared to Q2 2024.
Aerospace Segment Growth
Aerospace segment achieved organic sales growth of 11%, with order growth of 10% and backlog expansion of 16% year-over-year.
Raised 2025 Guidance
Eaton raised its 2025 guidance for organic growth and adjusted EPS at the midpoint.
Strategic Acquisitions and Partnerships
Eaton signed agreements to acquire Ultra PCS and Resilient Power Systems, along with partnerships with NVIDIA, Siemens Energy, and ChargePoint.
Negative Updates
Weakness in Vehicle Segment
Vehicle segment experienced an 8% decline in sales, primarily due to weaknesses in the North America truck market.
Challenges in eMobility Business
eMobility revenue decreased by 4%, with a $10 million operating loss.
Residential Market Weakness
The residential market is one of the smaller parts of the company and continues to underperform.
Company Guidance
During Eaton's second quarter 2025 earnings call, the company provided an optimistic outlook, raising its guidance for organic growth and adjusted EPS at the midpoint for 2025. Key metrics highlighted included an 8% year-over-year increase in adjusted earnings per share and a 20 basis point improvement in segment margins, achieving a record high for Q2. Organic growth was strong at 8%, with notable contributions from the Electrical Americas, Aerospace, and Electrical Global segments. Orders in Electrical Americas rebounded, increasing 2% on a rolling 12-month basis, while the backlog grew by 17% year-over-year, setting a new record. Aerospace orders rose by 10% on a rolling 12-month basis, and the backlog expanded 16% year-over-year, resulting in a book-to-bill ratio of 1.1 for the combined segments. Additionally, the data center market saw significant growth, with orders increasing by approximately 55% and sales rising 50% compared to Q2 2024. These strong performance metrics underpinned the decision to raise the 2025 guidance, demonstrating confidence in sustained growth and continued strategic investments.

Eaton Financial Statement Overview

Summary
Eaton demonstrates a strong financial position with consistent revenue and profit growth, efficient operations, and robust cash flow generation. The company's balanced approach to managing debt and equity supports its financial stability. While the rising debt levels require attention, Eaton's overall financial health is solid, positioning it well for future growth in the industrial machinery sector.
Income Statement
85
Very Positive
Eaton's income statement shows strong performance with consistent revenue growth and healthy profit margins. The TTM data indicates a revenue growth rate of 2.68%, supported by a solid gross profit margin of 38.20% and a net profit margin of 15.10%. The EBIT and EBITDA margins are also robust at 14.08% and 20.71% respectively, indicating efficient operations and cost management. Overall, Eaton demonstrates a stable and profitable income trajectory.
Balance Sheet
78
Positive
Eaton's balance sheet reflects a balanced financial structure with a debt-to-equity ratio of 0.62, which is manageable within the industry norms. The return on equity (ROE) is strong at 21.00%, indicating effective use of equity to generate profits. The equity ratio stands at 46.03%, suggesting a solid equity base. While the company maintains a healthy balance, the rising debt levels warrant monitoring to ensure long-term financial stability.
Cash Flow
80
Positive
Eaton's cash flow statement highlights a positive trend with a free cash flow growth rate of 9.22% in the TTM period. The operating cash flow to net income ratio is 0.43, and the free cash flow to net income ratio is 0.81, indicating strong cash generation relative to earnings. The company effectively converts its earnings into cash, supporting its operational and investment needs. Continued focus on cash flow management will be crucial to sustain growth.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue25.99B24.88B23.20B20.75B19.63B17.86B
Gross Profit9.92B9.50B8.43B6.91B6.32B5.45B
EBITDA5.54B5.63B4.96B3.95B3.96B2.78B
Net Income3.92B3.79B3.22B2.46B2.14B1.41B
Balance Sheet
Total Assets40.51B38.38B38.43B35.03B34.03B31.82B
Cash, Cash Equivalents and Short-Term Investments584.00M2.08B2.61B555.00M568.00M1.10B
Total Debt11.58B9.82B9.80B9.11B8.92B8.38B
Total Liabilities21.86B19.85B19.36B17.95B17.58B16.85B
Stockholders Equity18.65B18.49B19.04B17.04B16.41B14.93B
Cash Flow
Free Cash Flow3.62B3.52B2.87B1.94B1.59B2.56B
Operating Cash Flow4.06B4.33B3.62B2.53B2.16B2.94B
Investing Cash Flow-250.00M-271.00M-2.58B-1.20B-1.76B397.00M
Financing Cash Flow-3.79B-3.94B-871.00M-1.34B-535.00M-3.26B

Eaton Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price356.45
Price Trends
50DMA
351.76
Positive
100DMA
321.22
Positive
200DMA
327.83
Positive
Market Momentum
MACD
8.01
Positive
RSI
41.17
Neutral
STOCH
32.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ETN, the sentiment is Neutral. The current price of 356.45 is below the 20-day moving average (MA) of 375.32, above the 50-day MA of 351.76, and above the 200-day MA of 327.83, indicating a neutral trend. The MACD of 8.01 indicates Positive momentum. The RSI at 41.17 is Neutral, neither overbought nor oversold. The STOCH value of 32.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ETN.

Eaton Risk Analysis

Eaton disclosed 13 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

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$91.35B27.6827.16%0.94%-0.23%22.41%
76
Outperform
$139.48B35.8620.76%1.04%7.66%9.19%
73
Outperform
$57.89B37.808.15%0.59%13.59%6.52%
73
Outperform
$74.64B22.47109.06%2.38%-1.40%11.65%
71
Outperform
$79.07B33.5510.86%1.50%4.78%59.68%
68
Neutral
$39.00B44.0928.49%1.50%-8.23%
66
Neutral
£2.71B12.663.89%3.22%2.72%-23.08%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ETN
Eaton
356.45
71.81
25.23%
EMR
Emerson Electric Company
140.57
37.80
36.78%
ITW
Illinois Tool Works
256.04
21.90
9.35%
PH
Parker Hannifin
714.88
152.62
27.14%
ROK
Rockwell Automation
346.00
91.52
35.96%
ROP
Roper Technologies
537.93
17.98
3.46%

Eaton Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Eaton Expands Board with Gerald Johnson Appointment
Positive
Jul 23, 2025

On July 23, 2025, Eaton Corporation plc announced the election of Gerald Johnson to its Board of Directors, expanding the board from eleven to twelve members. Johnson, who retired as Executive Vice President of Global Manufacturing and Sustainability at General Motors, brings over 40 years of experience in global manufacturing and operations. His appointment is expected to enhance Eaton’s strategic growth initiatives, particularly in operations excellence and customer focus, aligning with the company’s commitment to sustainable power management solutions.

The most recent analyst rating on (ETN) stock is a Buy with a $340.00 price target. To see the full list of analyst forecasts on Eaton stock, see the ETN Stock Forecast page.

Executive/Board Changes
Eaton Announces Departure of Executive VP Ernest Marshall
Neutral
Jul 21, 2025

On July 21, 2025, Eaton Corporation plc announced the upcoming departure of Ernest Marshall, their Executive Vice President and Chief Human Resources Officer, effective September 30, 2025. In connection with his departure, Mr. Marshall will receive a compensation package including a payment of 1.5 times his annual salary and target incentive, pro-rated eligibility in incentive programs, and continued vesting of stock options and restricted share units.

The most recent analyst rating on (ETN) stock is a Buy with a $340.00 price target. To see the full list of analyst forecasts on Eaton stock, see the ETN Stock Forecast page.

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.Date of analysis: Aug 06, 2025