Eaton (ETN) AI Stock Analysis

• Market Cap: $128.77B
• Dividend Yield: 1.17%
• Average Volume (3M): 3.06M
• Price to Earnings (P/E): 33.2
• Beta (1Y): 1.39
• Revenue Growth: 7.00%
• EPS Growth: 16.84%
• Country: US
• Employees: 94,443
• Sector: Industrials
• Sector Strength: 91
• Industry: Industrial - Machinery
• EPS (TTM): 2.72
• Shares Outstanding: 391,300,000
• 10 Day Avg. Volume: 2,408,632
• 30 Day Avg. Volume: 3,059,089
• PEG Ratio: 7.18
• Price to Book (P/B): 6.55
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 36.54
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 1.32
• Enterprise Value/Gross Profit: 13.38
• Enterprise Value/Ebitda: 5.87
• 1Y Price Target: $357.27
• Price Target Upside: 8.50% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

Eaton's overall stock score of 81 reflects its strong financial performance, driven by significant revenue growth and profitability. The earnings call supports a positive outlook with record EPS and organic growth, although challenges in certain segments and valuation concerns temper the score. Technical indicators suggest potential for further gains, but caution is advised due to high stochastic levels.

Positive Factors

Aerospace Market

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

Data Center Performance

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.

Reshoring Initiative

The US Reshoring initiative is progressing faster than anticipated, positioning ETN as a top beneficiary of this trend.

Negative Factors

Commercial Building and Transportation

Commercial Building and Transportation were the only verticals to see declines, with negotiations down approximately 20% quarter over quarter.

Data Center Concerns

ETN Shares are down ~12% relative to the S&P 500 to start 2025, with concerns around data center growth affecting the company's performance.

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.

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's financial statements indicate strong overall financial health with significant revenue growth, high profitability margins, and efficient cash management. The company's income statement shows robust growth and profitability, while the balance sheet is stable with a moderate debt level. The cash flow remains healthy despite a slight decrease in free cash flow growth.

Income Statement

Eaton demonstrates strong financial performance with consistent revenue growth, shown by a revenue increase of 9.17% in the latest period. The company maintains healthy margins with a Gross Profit Margin of 53.96% and a Net Profit Margin of 15.55% for TTM (Trailing-Twelve-Months). The EBIT Margin of 34.89% and EBITDA Margin of 17.23% indicate efficient operations and cost management. Overall, the robust growth trajectory and high profitability metrics suggest a well-managed income statement.

Balance Sheet

Eaton's balance sheet reflects a stable financial structure with a moderate Debt-to-Equity Ratio of 0.58, indicating balanced leverage use. The Return on Equity (ROE) is strong at 21.23% TTM, demonstrating effective use of equity to generate profits. The Equity Ratio stands at 47.31%, highlighting solid capital positioning. While the company’s financial health is stable, the debt level warrants monitoring to maintain financial resilience.

Cash Flow

Eaton exhibits strong cash flow performance with a Free Cash Flow Growth Rate of -1.53%, showing stability despite a slight decrease. The Operating Cash Flow to Net Income Ratio is 1.04, indicating efficient cash generation relative to profits. The Free Cash Flow to Net Income Ratio at 0.88 reflects strong cash conversion efficiency. Overall, the cash flow statement suggests healthy liquidity and effective cash management.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
25.31B	24.88B	23.20B	20.75B	19.63B	17.86B
	Gross Profit
9.73B	9.50B	8.43B	6.89B	6.33B	5.45B
	EBIT
4.90B	4.63B	3.88B	2.08B	1.50B	863.00M
	EBITDA
5.80B	5.63B	4.90B	3.03B	2.42B	1.67B
	Net Income Common Stockholders
3.94B	3.79B	3.22B	2.46B	2.14B	1.41B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.94B	2.08B	2.61B	555.00M	568.00M	1.10B
	Total Assets
39.21B	38.38B	38.43B	35.03B	34.03B	31.82B
	Total Debt
10.75B	9.82B	9.80B	9.11B	8.92B	8.38B
	Net Debt
8.97B	9.27B	9.31B	8.82B	8.62B	7.95B
	Total Liabilities
20.66B	19.85B	19.36B	17.95B	17.58B	16.85B
	Stockholders Equity
18.51B	18.49B	19.04B	17.04B	16.41B	14.93B
Cash Flow		Free Cash Flow
3.32B	3.52B	2.87B	1.94B	1.59B	2.56B
	Operating Cash Flow
4.09B	4.33B	3.62B	2.53B	2.16B	2.94B
	Investing Cash Flow
929.00M	-271.00M	-2.58B	-1.20B	-1.76B	397.00M
	Financing Cash Flow
-3.64B	-3.94B	-871.00M	-1.34B	-535.00M	-3.26B

Eaton Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 329.29
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 329.29 is above the 20-day moving average (MA) of 303.32, above the 50-day MA of 288.22, and above the 200-day MA of 315.92, indicating a bullish trend. The MACD of 13.07 indicates Negative momentum. The RSI at 71.65 is Negative, neither overbought nor oversold. The STOCH value of 85.63 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	81 Outperform	$128.77B	33.22	20.84%	1.17%	7.00%	16.84%
ITW	78 Outperform	$73.64B	22.12	107.62%	2.35%	-1.85%	12.04%
ROP	78 Outperform	$62.67B	42.04	8.09%	0.54%	13.34%	1.98%
PH	76 Outperform	$86.94B	26.19	27.16%	0.96%	-0.23%	22.41%
EMR	73 Outperform	$67.26B	28.79	9.82%	1.75%	6.49%	24.14%
ROK	68 Neutral	$34.84B	38.91	25.86%	1.66%	-11.19%	-22.50%
Sector *	64 Neutral	$4.44B	11.99	5.16%	249.23%	4.01%	-11.87%

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.