Eaton (ETN)
Market Price (2/28/2026): $374.87 | Market Cap: $145.7 BilSector: Industrials | Industry: Electrical Components & Equipment
Eaton (ETN)
Market Price (2/28/2026): $374.87Market Cap: $145.7 BilSector: IndustrialsIndustry: Electrical Components & Equipment
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 15%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 12%, CFO LTM is 4.1 Bil, FCF LTM is 3.3 Bil | Expensive valuation multiplesP/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 36x |
| Low stock price volatilityVol 12M is 35% | Key risksETN key risks include [1] elevated inventory levels indicating potential demand or supply chain challenges and [2] failing to maintain its innovative edge and cost-competitiveness in the face of intense competition. |
| Megatrend and thematic driversMegatrends include Smart Grids & Grid Modernization, Renewable Energy Transition, Electric Vehicles & Autonomous Driving, Sustainable & Green Buildings, Show more. |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 15%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 12%, CFO LTM is 4.1 Bil, FCF LTM is 3.3 Bil |
| Low stock price volatilityVol 12M is 35% |
| Megatrend and thematic driversMegatrends include Smart Grids & Grid Modernization, Renewable Energy Transition, Electric Vehicles & Autonomous Driving, Sustainable & Green Buildings, Show more. |
| Expensive valuation multiplesP/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 36x |
| Key risksETN key risks include [1] elevated inventory levels indicating potential demand or supply chain challenges and [2] failing to maintain its innovative edge and cost-competitiveness in the face of intense competition. |
Qualitative Assessment
AI Analysis | Feedback
1. Mixed Q4 2025 Earnings and Cautious Guidance Interpretation.
Eaton's fourth quarter 2025 adjusted earnings per share of $3.33 met analyst consensus estimates, yet its revenue of $7.06 billion slightly missed expectations. Following the earnings announcement on February 3, 2026, the stock experienced a pre-market decline of 4.89%. Although the company provided a robust 2026 outlook, projecting organic growth of 7-9% and adjusted EPS between $13.00 and $13.50, this guidance may have been met with some market caution, leading to a balanced reaction that prevented a significant breakout or breakdown in the stock price.
2. Offsetting Impact of Strong Backlog and Strategic Restructuring.
Eaton reported record fourth quarter 2025 sales and segment margins, bolstered by accelerating orders and substantial backlog growth, including a 29% increase in the Electrical sector and 16% in the Aerospace segment, largely driven by strong data center demand. Concurrently, the company announced its intention to spin off its Mobility Group, a strategic move generally perceived as streamlining operations to focus on higher-growth electrical markets. These positive company-specific developments and strategic portfolio adjustments likely counteracted any negative sentiment from the slight revenue miss, contributing to the stock's overall stability.
Show more
Stock Movement Drivers
Fundamental Drivers
The -1.2% change in ETN stock from 10/31/2025 to 2/27/2026 was primarily driven by a -2.4% change in the company's Net Income Margin (%).| (LTM values as of) | 10312025 | 2272026 | Change |
|---|---|---|---|
| Stock Price ($) | 380.53 | 375.92 | -1.2% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 25,990 | 26,633 | 2.5% |
| Net Income Margin (%) | 15.1% | 14.7% | -2.4% |
| P/E Multiple | 37.8 | 37.2 | -1.6% |
| Shares Outstanding (Mil) | 390 | 389 | 0.4% |
| Cumulative Contribution | -1.2% |
Market Drivers
10/31/2025 to 2/27/2026| Return | Correlation | |
|---|---|---|
| ETN | -1.2% | |
| Market (SPY) | 0.6% | 60.0% |
| Sector (XLI) | 14.2% | 71.5% |
Fundamental Drivers
The -1.7% change in ETN stock from 7/31/2025 to 2/27/2026 was primarily driven by a -5.2% change in the company's Net Income Margin (%).| (LTM values as of) | 7312025 | 2272026 | Change |
|---|---|---|---|
| Stock Price ($) | 382.57 | 375.92 | -1.7% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 25,312 | 26,633 | 5.2% |
| Net Income Margin (%) | 15.6% | 14.7% | -5.2% |
| P/E Multiple | 38.1 | 37.2 | -2.3% |
| Shares Outstanding (Mil) | 392 | 389 | 0.9% |
| Cumulative Contribution | -1.7% |
Market Drivers
7/31/2025 to 2/27/2026| Return | Correlation | |
|---|---|---|
| ETN | -1.7% | |
| Market (SPY) | 8.8% | 57.1% |
| Sector (XLI) | 17.0% | 63.7% |
Fundamental Drivers
The 16.6% change in ETN stock from 1/31/2025 to 2/27/2026 was primarily driven by a 9.6% change in the company's P/E Multiple.| (LTM values as of) | 1312025 | 2272026 | Change |
|---|---|---|---|
| Stock Price ($) | 322.31 | 375.92 | 16.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 24,605 | 26,633 | 8.2% |
| Net Income Margin (%) | 15.3% | 14.7% | -3.7% |
| P/E Multiple | 34.0 | 37.2 | 9.6% |
| Shares Outstanding (Mil) | 397 | 389 | 2.1% |
| Cumulative Contribution | 16.6% |
Market Drivers
1/31/2025 to 2/27/2026| Return | Correlation | |
|---|---|---|
| ETN | 16.6% | |
| Market (SPY) | 15.0% | 73.7% |
| Sector (XLI) | 29.4% | 74.6% |
Fundamental Drivers
The 141.9% change in ETN stock from 1/31/2023 to 2/27/2026 was primarily driven by a 37.7% change in the company's P/E Multiple.| (LTM values as of) | 1312023 | 2272026 | Change |
|---|---|---|---|
| Stock Price ($) | 155.38 | 375.92 | 141.9% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 20,166 | 26,633 | 32.1% |
| Net Income Margin (%) | 11.4% | 14.7% | 29.8% |
| P/E Multiple | 27.0 | 37.2 | 37.7% |
| Shares Outstanding (Mil) | 398 | 389 | 2.5% |
| Cumulative Contribution | 141.9% |
Market Drivers
1/31/2023 to 2/27/2026| Return | Correlation | |
|---|---|---|
| ETN | 141.9% | |
| Market (SPY) | 75.0% | 66.8% |
| Sector (XLI) | 81.5% | 70.7% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| ETN Return | 47% | -7% | 56% | 40% | -3% | 18% | 239% |
| Peers Return | 14% | 7% | 22% | 31% | 20% | 18% | 175% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 1% | 84% |
Monthly Win Rates [3] | |||||||
| ETN Win Rate | 75% | 25% | 67% | 75% | 50% | 100% | |
| Peers Win Rate | 60% | 45% | 48% | 58% | 58% | 100% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 50% | |
Max Drawdowns [4] | |||||||
| ETN Max Drawdown | -4% | -27% | -3% | -3% | -25% | 0% | |
| Peers Max Drawdown | -5% | -19% | -11% | -5% | -22% | 0% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -1% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: EMR, PH, HUBB, CMI, HON. See ETN Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 2/27/2026 (YTD)
How Low Can It Go
| Event | ETN | S&P 500 |
|---|---|---|
| 2022 Inflation Shock | ||
| % Loss | -28.4% | -25.4% |
| % Gain to Breakeven | 39.7% | 34.1% |
| Time to Breakeven | 218 days | 464 days |
| 2020 Covid Pandemic | ||
| % Loss | -45.0% | -33.9% |
| % Gain to Breakeven | 81.9% | 51.3% |
| Time to Breakeven | 163 days | 148 days |
| 2018 Correction | ||
| % Loss | -26.7% | -19.8% |
| % Gain to Breakeven | 36.4% | 24.7% |
| Time to Breakeven | 309 days | 120 days |
| 2008 Global Financial Crisis | ||
| % Loss | -70.5% | -56.8% |
| % Gain to Breakeven | 238.8% | 131.3% |
| Time to Breakeven | 665 days | 1,480 days |
Compare to EMR, PH, HUBB, CMI, HON
In The Past
Eaton's stock fell -28.4% during the 2022 Inflation Shock from a high on 11/9/2021. A -28.4% loss requires a 39.7% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
About Eaton (ETN)
AI Analysis | Feedback
Here are 1-3 brief analogies for Eaton (ETN):
- A General Electric (GE) focused on power management.
- The Siemens of power management, providing electrical, aerospace, and vehicle solutions.
AI Analysis | Feedback
- Electrical Products: Designs and manufactures electrical components and systems, including power distribution equipment, circuit protection devices, and uninterruptible power supplies (UPS) for various industries.
- Aerospace Systems: Produces critical aerospace components such as hydraulic, fuel, and pneumatic systems, as well as engine solutions and motion control products for commercial and military aircraft.
- Vehicle Products: Offers powertrain components like transmissions, clutches, and engine valves, along with other products for commercial vehicles, off-highway equipment, and passenger cars.
- eMobility Solutions: Develops and supplies power electronics, intelligent power distribution units, and circuit protection systems specifically for electric vehicles (EVs) and charging infrastructure.
AI Analysis | Feedback
Eaton (symbol: ETN) primarily sells its products and services to other businesses (B2B) across a wide range of industries globally, rather than directly to individual consumers. Due to the diversified nature of its operations and a broad customer base, Eaton typically does not disclose specific major customer companies by name in its public filings, as no single customer generally accounts for a material portion of its consolidated revenues.
However, based on its various business segments, Eaton's major customers are found within the following industries and customer categories. The companies listed below are examples of public companies that operate within these sectors and are representative of Eaton's customer base, though Eaton does not publicly confirm specific individual major customers due to the vast number of clients it serves:
-
Data Center Operators and Cloud Service Providers: Eaton provides critical power infrastructure, uninterruptible power supplies (UPS), power distribution units (PDUs), and related services to ensure reliable operation of data centers.
Examples of companies that operate in this space and utilize such equipment include:- Microsoft Corporation (MSFT)
- Amazon.com, Inc. (AMZN) (for AWS data centers)
- Alphabet Inc. (GOOGL) (for Google Cloud Platform data centers)
- Equinix, Inc. (EQIX)
-
Aerospace Original Equipment Manufacturers (OEMs) and Airlines: Eaton supplies hydraulic, fuel, motion control, and engine solutions for commercial and military aircraft.
Examples of companies in this sector include:- The Boeing Company (BA)
- Airbus SE (AIR.PA) (European listed, a major global OEM)
-
Vehicle Original Equipment Manufacturers (OEMs): Eaton provides a range of components for commercial vehicles, off-highway equipment, and passenger cars, including transmissions, engine components, and eMobility solutions.
Examples of companies in this sector include:- PACCAR Inc (PCAR)
- Cummins Inc. (CMI)
- Caterpillar Inc. (CAT)
- Deere & Company (DE)
- Daimler Truck Holding AG (DTG.DE) (European listed)
-
Electric Utilities and Grid Operators: Eaton supplies equipment for power transmission, distribution, and grid modernization.
Examples of public utility companies that utilize such infrastructure include:- NextEra Energy, Inc. (NEE)
- Duke Energy Corporation (DUK)
- Southern Company (SO)
- Commercial and Industrial Construction/Developers: Eaton's electrical products and systems are integral to commercial buildings, factories, hospitals, and other industrial facilities. Products are often purchased through distributors and electrical contractors by large-scale commercial and industrial developers. While these are typically indirect customers, the projects represent significant end-users of Eaton's products.
AI Analysis | Feedback
nullAI Analysis | Feedback
Craig Arnold, Chairman and Chief Executive Officer
Craig Arnold has served as Chairman and Chief Executive Officer of Eaton, a global intelligent power management company, since June 1, 2016. He will retire on May 31, 2025. Prior to his CEO appointment, Arnold was named Eaton's President and Chief Operating Officer on September 1, 2015. He previously held the role of Vice Chairman and Chief Operating Officer of the Industrial Sector from February 2009 to August 2015. Arnold joined Eaton in 2000 as senior vice president and group executive of the Fluid Power Group. Before joining Eaton, he spent 17 years at General Electric Company, starting in 1983, where he served as corporate vice president and president of GE Lighting Services Ltd., leading its lighting business in Europe, the Middle East, Africa, and India. He also held positions as corporate vice president and president of GE Plastics, Greater China, and GE Appliances, Asia, from 1997 to 1999.
Paulo Ruiz, President and Chief Operating Officer
Paulo Ruiz is the President and Chief Operating Officer of Eaton, a position he assumed on September 2, 2024. He is slated to become the Chief Executive Officer of Eaton on June 1, 2025. Before his current role, Ruiz served as the President and Chief Operating Officer of Eaton's Industrial Sector from July 2022. He also held roles as president of Energy Solutions and Services, Americas for Eaton's Electrical Sector, and president of the Hydraulics Group. Prior to joining Eaton in 2019, Ruiz spent over 18 years at Siemens, where his roles included CEO of Dresser-Rand (a Siemens Business) and segment head for high voltage products. At Dresser-Rand, he was responsible for integrating Siemens' rotating equipment business. Earlier in his career, he spent six years in operations, commercial, and engineering roles at Fiat.
Olivier Leonetti, Executive Vice President and Chief Financial Officer
Olivier Leonetti was appointed Executive Vice President and Chief Financial Officer of Eaton, effective February 5, 2024. He joined Eaton from Johnson Controls, where he also served as Executive Vice President and Chief Financial Officer. Before his tenure at Johnson Controls, Leonetti held CFO positions at Zebra Technologies Corporation and Western Digital Corporation. His background also includes senior finance leadership roles at Global Commercial Organization, Amgen, Inc., and Dell, Inc. He was a member of Eaton's board of directors from 2019 until he assumed his CFO role in February 2024.
Heath Monesmith, President and Chief Operating Officer, Electrical Sector
Heath Monesmith is the President and Chief Operating Officer for Eaton's Electrical Sector. In this role, he is responsible for the company's global electrical business and has corporate responsibility for Eaton's Europe, Middle East, and Africa region. Previously, Monesmith served as President and Chief Operating Officer for Eaton's Industrial Sector. Before leading the Industrial Sector, he held various positions of increasing responsibility within Eaton's Law Department, including Executive Vice President and General Counsel, overseeing all legal matters for the company. Monesmith joined Eaton in 2012 as part of the acquisition of Cooper Industries. At Cooper Industries, from 2006, he served in roles such as Vice President and Associate General Counsel of Litigation, and Executive Vice President, Human Resources. Earlier in his career, he was a partner at the K&L Gates law firm.
Pete Denk, President of the Mobility Group
Pete Denk is currently the President of the Mobility Group at Eaton. He is set to become the President and Chief Operating Officer of the Industrial Sector, effective January 1, 2025. Denk joined Eaton in 2018. Prior to his time at Eaton, he accumulated nearly 20 years of experience in various leadership roles at Robert Bosch LLC.
AI Analysis | Feedback
Here are the key risks to Eaton (ETN):
- Economic and Market Volatility and Regulatory Changes: Eaton's financial performance is significantly susceptible to broader economic downturns, geopolitical events, currency fluctuations, and changes in government regulations and trade policies across the many global markets it serves. The company also faces risks from commodity and wage inflation, which can impact its gross profit margins.
- Operational Risks, including Cybersecurity and Supply Chain Disruptions: Eaton relies heavily on its information technology infrastructure and global manufacturing facilities. The company is exposed to risks such as cyber-attacks, data breaches, service interruptions, and disruptions to production caused by natural disasters, labor issues, political instability, or public health crises. Recent reports also highlight elevated inventory levels, indicating potential challenges in demand or supply chain management.
- Intense Competition and Rapid Technological Advancements: Eaton operates in highly competitive industries where product performance, technological innovation, global service, and pricing are critical factors. The company faces ongoing threats from competitors introducing new products or engaging in aggressive pricing strategies, which could erode Eaton's market share if it fails to maintain its innovative edge and cost competitiveness.
AI Analysis | Feedback
The accelerating transition to electric vehicles (EVs) in commercial and off-highway markets poses a clear emerging threat to Eaton's traditional Vehicle segment. As manufacturers shift from internal combustion engine (ICE) powertrains, the demand for Eaton's legacy products such as transmissions, clutches, and driveline components for ICE vehicles is expected to decline significantly. While Eaton is actively investing in its eMobility segment to capitalize on EV components, a rapid acceleration in EV adoption could lead to a faster decline in its established Vehicle segment revenues than the growth of its new eMobility offerings, creating a potential revenue and market share gap.
AI Analysis | Feedback
Eaton (ETN) operates in several key markets, with significant addressable market opportunities in its Electrical, Aerospace, and eMobility segments.
eMobility:
- The global vehicle electrification market is projected to reach 15 million pure battery-electric vehicles and 30 million hybrids by 2030.
- Globally, plug-in electric vehicles constituted 13.6% of vehicle sales in 2022 and are expected to account for 41% of sales in major regions combined by 2028.
- The global electric vehicle (EV) charging station market (public, semi-public, and commercial) is anticipated to grow from 2.7 million installations in 2022 to 12.3 million by 2028. Domestic EVSE (Electric Vehicle Supply Equipment) installations are projected to increase from 10.4 million in 2022 to 55.9 million by 2028.
- In the U.S., the number of plug-in vehicles on the road is forecast to rise from 2.9 million in 2022 to approximately 40 million by 2030.
- In the EU27 and the United Kingdom, EV sales are predicted to exceed 60% of total vehicle sales by 2028, with 88% of those being Battery Electric Vehicles (BEVs).
- The global electric vehicle market as a whole is projected to grow by a Compound Annual Growth Rate (CAGR) of 13.8% from 2024 through 2032.
Aerospace:
- The global aerospace parts manufacturing market was valued at USD 888.6 billion in 2022 and is projected to reach USD 1,435.2 billion by 2032, exhibiting a CAGR of 5.0%.
Electrical Sector (Americas and Global):
- Eaton's Electrical Americas segment reported a record backlog of $12 billion in Q3 2025, representing a 20% year-over-year increase.
- Data center orders for Eaton's Electrical business increased by nearly 70% in Q3 2025 across both the Americas and globally.
- The industrial electrical component market, which includes markets such as data centers, utilities, factories, and energy facilities, is forecasted to grow from $57.2 billion in 2024 to $90.48 billion in 2029 (a CAGR of 4%).
Vehicle:
- null
AI Analysis | Feedback
Eaton (ETN) is poised for future revenue growth over the next 2-3 years, driven by several strategic initiatives and market tailwinds:
- Booming Data Center Market and AI Integration: Eaton is experiencing significant revenue growth from the expansion of data centers, fueled by increasing digitalization and the proliferation of artificial intelligence. In Q3 2025, Electrical Sector and Electrical Americas data center orders were up approximately 70%, with revenue increasing about 40% compared to Q3 2024. The company's recent agreement to acquire Boyd Thermal, which specializes in liquid cooling technology, further strengthens its position in this high-growth market, particularly for AI factories.
- Increased Infrastructure Spending and Energy Transition: Global trends in reindustrialization, infrastructure development, and the energy transition are expected to be significant drivers. Eaton's strategy focuses on capitalizing on these generational opportunities through electrification, digitalization, and green energy solutions.
- Robust Organic Growth and Strong Backlog: Eaton consistently reports strong organic growth, with a forecast of 8.5-9.5% for the full year 2025. This growth is supported by a record-level backlog, particularly in the Electrical Americas segment, which was up 20% year-over-year in Q3 2025, providing substantial revenue visibility for the coming years.
- Strong Performance in the Aerospace Segment: The Aerospace segment continues to demonstrate strong demand, with order growth of 11% on a rolling twelve-month basis and backlog expansion of 15% year-over-year in Q3 2025. This sustained strength in the aerospace market contributes significantly to Eaton's overall revenue outlook.
AI Analysis | Feedback
Share Repurchases
- Eaton's Board of Directors authorized a new share repurchase program on February 27, 2025, for up to $9.0 billion in ordinary share repurchases over a three-year period, replacing the previous $5.0 billion program from 2022.
- For the nine months ended September 30, 2025, the company repurchased 5.2 million ordinary shares at a total cost of $1,661 million.
- In 2024, Eaton repurchased 4.2 million shares for $1.34 billion in the first half, with plans to repurchase between $1.5 billion and $2.5 billion for the full year. Annual share buybacks for 2024 were $2.492 billion.
Share Issuance
- Eaton's ordinary shares outstanding showed a general trend of slight decline, with 390 million shares outstanding as of September 30, 2025, representing a 2.21% decrease year-over-year.
Outbound Investments
- In 2025, Eaton acquired Boyd, a leader in liquid cooling technologies, expected to generate $1.7 billion in sales, and completed acquisitions of Ultra PCS for $1.55 billion, Fibrebond for $1.4 billion, and Resilient Power for $86 million.
- In 2022, Eaton acquired Royal Power Solutions for $600 million, enhancing its electrical connectivity and electrification capabilities.
- In 2021, major acquisitions included Tripp Lite for approximately $1.7 billion, specializing in UPS, and Cobham Mission Systems for $2.8 billion, strengthening its aerospace and defense portfolio. Eaton also divested its Hydraulics business for a pre-tax gain of $617 million in 2021.
Capital Expenditures
- Eaton expects capital expenditures to be approximately $900 million in 2025 and approximately $800 million in 2024.
- Actual capital expenditures were $800 million in 2023 and $600 million in 2022.
- Capital expenditure is primarily focused on supporting growth driven by electrification, energy transition, and digitalization, including significant capacity investment projects.
Latest Trefis Analyses
Trade Ideas
Select ideas related to ETN.
| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 01312026 | CR | Crane | Insider | Insider Buys 45DStrong Insider BuyingCompanies with multiple insider buys in the last 45 days | 11.5% | 11.5% | 0.0% |
| 01302026 | FBIN | Fortune Brands Innovations | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 0.7% | 0.7% | -4.7% |
| 01302026 | PAYC | Paycom Software | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | -8.0% | -8.0% | -15.1% |
| 01302026 | HTZ | Hertz Global | Special | Short Squeeze PotentialShort Squeeze PotentialHas potential for a short squeeze. High short interest, rising short interest and high debt. | -9.8% | -9.8% | -9.8% |
| 01232026 | PAYX | Paychex | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | -14.4% | -14.4% | -18.0% |
Research & Analysis
Invest in Strategies
Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 443.77 |
| Mkt Cap | 106.0 |
| Rev LTM | 23,547 |
| Op Inc LTM | 4,082 |
| FCF LTM | 2,948 |
| FCF 3Y Avg | 2,573 |
| CFO LTM | 3,681 |
| CFO 3Y Avg | 3,297 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 3.7% |
| Rev Chg 3Y Avg | 6.5% |
| Rev Chg Q | 8.0% |
| QoQ Delta Rev Chg LTM | 1.9% |
| Op Mgn LTM | 19.4% |
| Op Mgn 3Y Avg | 18.8% |
| QoQ Delta Op Mgn LTM | 0.3% |
| CFO/Rev LTM | 17.1% |
| CFO/Rev 3Y Avg | 16.1% |
| FCF/Rev LTM | 14.6% |
| FCF/Rev 3Y Avg | 13.1% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 106.0 |
| P/S | 4.6 |
| P/EBIT | 23.5 |
| P/E | 33.1 |
| P/CFO | 27.2 |
| Total Yield | 3.9% |
| Dividend Yield | 0.9% |
| FCF Yield 3Y Avg | 3.8% |
| D/E | 0.1 |
| Net D/E | 0.1 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 6.9% |
| 3M Rtn | 17.5% |
| 6M Rtn | 19.2% |
| 12M Rtn | 35.9% |
| 3Y Rtn | 118.0% |
| 1M Excs Rtn | 8.3% |
| 3M Excs Rtn | 16.8% |
| 6M Excs Rtn | 10.8% |
| 12M Excs Rtn | 17.4% |
| 3Y Excs Rtn | 50.3% |
Comparison Analyses
Segment Financials
Revenue by Segment| $ Mil | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| Electrical Americas | 10,098 | 8,497 | 7,242 | 6,680 | 8,175 |
| Electrical Global | 6,084 | 5,848 | 5,516 | 4,703 | 5,172 |
| Aerospace | 3,413 | 3,039 | 2,648 | 2,223 | 2,480 |
| Vehicle | 2,965 | 2,830 | 2,579 | 2,118 | 3,038 |
| eMobility | 636 | 538 | 343 | 292 | 321 |
| Hydraulics | 0 | 1,300 | 1,842 | 2,204 | |
| Total | 23,196 | 20,752 | 19,628 | 17,858 | 21,390 |
| $ Mil | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| Electrical Americas | 2,675 | 1,913 | 1,495 | 1,352 | 1,549 |
| Electrical Global | 1,176 | 1,134 | 1,034 | 750 | 897 |
| Aerospace | 780 | 705 | 580 | 414 | 595 |
| Vehicle | 482 | 453 | 449 | 243 | 460 |
| eMobility | -21 | -9 | -29 | -8 | 17 |
| Hydraulics | 0 | 177 | 186 | 193 | |
| Total | 5,092 | 4,196 | 3,706 | 2,937 | 3,711 |
| $ Mil | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| Goodwill | 14,977 | 14,796 | 14,751 | 12,903 | 13,456 |
| Corporate | 6,243 | 3,929 | 3,906 | 4,099 | 3,514 |
| Other intangible assets | 5,091 | 5,485 | 5,855 | 4,175 | 4,638 |
| Electrical Americas | 4,163 | 3,655 | 3,002 | 2,333 | 2,360 |
| Electrical Global | 2,868 | 2,658 | 2,579 | 2,334 | 2,319 |
| Aerospace | 2,276 | 1,859 | 1,729 | 1,363 | 1,562 |
| Vehicle | 2,251 | 2,230 | 1,985 | 1,950 | 2,145 |
| eMobility | 563 | 402 | 220 | 180 | 141 |
| Assets held for sale | 2,487 | 1,377 | |||
| Hydraulics | 1,293 | ||||
| Total | 38,432 | 35,014 | 34,027 | 31,824 | 32,805 |
Price Behavior
| Market Price | $375.92 | |
| Market Cap ($ Bil) | 146.2 | |
| First Trading Date | 06/01/1972 | |
| Distance from 52W High | -5.1% | |
| 50 Days | 200 Days | |
| DMA Price | $346.92 | $352.52 |
| DMA Trend | up | up |
| Distance from DMA | 8.4% | 6.6% |
| 3M | 1YR | |
| Volatility | 31.8% | 34.6% |
| Downside Capture | 83.98 | 144.73 |
| Upside Capture | 135.69 | 147.98 |
| Correlation (SPY) | 53.1% | 74.4% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 0.86 | 1.58 | 1.73 | 1.58 | 1.33 | 1.37 |
| Up Beta | -0.83 | 0.54 | 0.62 | 0.44 | 1.17 | 1.34 |
| Down Beta | 1.47 | 2.38 | 2.63 | 1.82 | 1.27 | 1.31 |
| Up Capture | 175% | 139% | 130% | 155% | 193% | 342% |
| Bmk +ve Days | 11 | 22 | 34 | 71 | 142 | 430 |
| Stock +ve Days | 12 | 22 | 31 | 64 | 126 | 411 |
| Down Capture | -28% | 122% | 178% | 193% | 131% | 108% |
| Bmk -ve Days | 9 | 19 | 27 | 54 | 109 | 321 |
| Stock -ve Days | 8 | 19 | 30 | 61 | 125 | 341 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ETN | |
|---|---|---|---|---|
| ETN | 28.2% | 34.6% | 0.77 | - |
| Sector ETF (XLI) | 32.7% | 19.1% | 1.35 | 74.7% |
| Equity (SPY) | 16.5% | 19.4% | 0.66 | 74.3% |
| Gold (GLD) | 81.3% | 25.7% | 2.29 | 1.9% |
| Commodities (DBC) | 13.4% | 16.9% | 0.58 | 25.2% |
| Real Estate (VNQ) | 7.3% | 16.6% | 0.25 | 38.5% |
| Bitcoin (BTCUSD) | -20.2% | 44.9% | -0.37 | 32.3% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ETN | |
|---|---|---|---|---|
| ETN | 25.6% | 28.9% | 0.82 | - |
| Sector ETF (XLI) | 15.9% | 17.2% | 0.74 | 74.4% |
| Equity (SPY) | 13.6% | 17.0% | 0.63 | 67.8% |
| Gold (GLD) | 23.5% | 17.1% | 1.12 | 4.9% |
| Commodities (DBC) | 10.6% | 19.0% | 0.44 | 16.3% |
| Real Estate (VNQ) | 5.1% | 18.8% | 0.18 | 41.7% |
| Bitcoin (BTCUSD) | 4.5% | 57.0% | 0.30 | 23.5% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ETN | |
|---|---|---|---|---|
| ETN | 24.2% | 29.4% | 0.79 | - |
| Sector ETF (XLI) | 15.2% | 19.8% | 0.68 | 80.6% |
| Equity (SPY) | 15.4% | 17.9% | 0.74 | 72.8% |
| Gold (GLD) | 15.3% | 15.6% | 0.82 | 0.1% |
| Commodities (DBC) | 8.7% | 17.6% | 0.41 | 27.2% |
| Real Estate (VNQ) | 6.6% | 20.7% | 0.28 | 51.4% |
| Bitcoin (BTCUSD) | 66.2% | 66.8% | 1.06 | 15.7% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Returns Analyses
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 2/3/2026 | 0.9% | ||
| 11/4/2025 | -2.3% | -1.5% | -12.1% |
| 8/5/2025 | -7.4% | -6.1% | -10.6% |
| 5/2/2025 | -0.6% | 2.1% | 6.1% |
| 1/31/2025 | -0.2% | -3.4% | -14.9% |
| 10/31/2024 | -3.3% | 5.1% | 9.8% |
| 8/1/2024 | -2.3% | -8.6% | -0.9% |
| 4/30/2024 | -2.5% | 0.5% | 2.3% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 13 | 16 | 14 |
| # Negative | 11 | 7 | 9 |
| Median Positive | 3.6% | 4.7% | 9.6% |
| Median Negative | -2.3% | -3.4% | -5.4% |
| Max Positive | 7.5% | 10.9% | 19.4% |
| Max Negative | -7.4% | -8.6% | -14.9% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 09/30/2025 | 11/04/2025 | 10-Q |
| 06/30/2025 | 08/05/2025 | 10-Q |
| 03/31/2025 | 05/02/2025 | 10-Q |
| 12/31/2024 | 02/27/2025 | 10-K |
| 09/30/2024 | 10/31/2024 | 10-Q |
| 06/30/2024 | 08/01/2024 | 10-Q |
| 03/31/2024 | 04/30/2024 | 10-Q |
| 12/31/2023 | 02/29/2024 | 10-K |
| 09/30/2023 | 10/31/2023 | 10-Q |
| 06/30/2023 | 08/01/2023 | 10-Q |
| 03/31/2023 | 05/02/2023 | 10-Q |
| 12/31/2022 | 02/23/2023 | 10-K |
| 09/30/2022 | 11/01/2022 | 10-Q |
| 06/30/2022 | 08/02/2022 | 10-Q |
| 03/31/2022 | 05/03/2022 | 10-Q |
| 12/31/2021 | 02/23/2022 | 10-K |
Insider Activity
Expand for More| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Johnson, Gerald | Direct | Buy | 11192025 | 339.89 | 200 | 67,978 | 135,956 | Form | |
| 2 | Johnson, Gerald | Direct | Buy | 11042025 | 384.33 | 100 | 38,434 | 76,867 | Form | |
| 3 | Johnson, Gerald | Direct | Buy | 8122025 | 361.00 | 100 | 36,100 | 36,100 | Form | |
| 4 | Leonetti, Olivier | See Remarks below. | Direct | Sell | 8112025 | 358.39 | 16,018 | 5,740,688 | 225,786 | Form |
| 5 | Thompson, Dorothy C | Direct | Sell | 5212025 | 327.21 | 140 | 45,809 | 258,496 | Form |
ETN Trade Sentinel
OVERWEIGHT (Score 9-10)
CONVICTION RATIONALE
The probability-adjusted skew of 2.36x is highly attractive. The investment thesis hinges on a powerful, secular tailwind (AI/Electrification) that is confirmed by leading indicators (surging backlog). The primary risk (margin pressure) is operational and appears manageable and temporary, whereas the Alpha Driver is structural and multi-year. This provides a compelling asymmetric risk/reward profile, justifying a high conviction Overweight rating.
STOCK ARCHETYPE
Cyclical / CommodityEaton's revenue is primarily driven by large, project-based capital expenditure cycles in electrical infrastructure and aerospace. The provided data explicitly classifies its revenue archetype as 'The 'Project' Hunter (Cyclical/Capex)', making it a Type C stock where timing the cycle is critical.
INVESTMENT THESIS
The primary driver for Eaton is the secular, high-margin growth within its Electrical Americas segment, propelled by an unprecedented surge in demand from AI-driven data centers and grid modernization projects. This is structurally enhanced by the strategic spin-off of the low-margin, declining Vehicle and eMobility businesses.
- Data center orders surged ~200% in Q4 2025.
- Electrical Americas backlog grew 31% YoY to a record $13.2 billion in Q4 2025.
- The rolling 12-month book-to-bill ratio for Electrical and Aerospace is a strong 1.1x, indicating demand is outpacing revenue recognition.
- The planned spin-off of the Mobility business (~13% margin) will structurally accrete to consolidated margins, which reached a record 24.9% in Q4 2025, driven by Electrical Americas at 29.8%.
PRIMARY RISK
The most significant near-term friction is self-inflicted margin pressure from the aggressive costs required to ramp up manufacturing capacity to meet the historic surge in data center demand. This operational challenge could lead to near-term earnings misses and temper enthusiasm for the growth story.
- Management attributed a 180 bps YoY decline in Q4 2025 Electrical Americas operating margin partly to ramp costs.
- These costs are expected to impact margins by another 130 bps in 2026, with the heaviest impact in Q1.
| KPI | Threshold | Rationale |
|---|---|---|
| Electrical Americas Segment Margin | >23.0% | This is the primary KPI to track the 'Anti-Alpha' risk. Margins below this level would indicate that ramp-up costs are higher than expected, threatening full-year profitability targets. |
| Electrical Americas Backlog Growth (YoY) | >20% | This leading indicator validates the durability of the 'Alpha Driver'. Deceleration below 20% could signal the emergence of a data center 'digestion' cycle, a key secondary risk. |
| Company-Wide Book-to-Bill Ratio | >1.0x | A sustained ratio above 1.0 indicates that demand continues to outstrip supply, providing visibility for future revenue growth. A drop below 1.0 would signal a potential peak in the cycle. |
Execution Risk: Can Margins Withstand the Demand Boom?
BULL VIEW
Surging demand, reflected in a +29% YoY backlog and 1.1x book-to-bill, allows for pricing power that will offset temporary ramp costs, driving long-term operating leverage.
CORE TENSION
Can Eaton expand capacity fast enough to capture historic data center demand without margins collapsing from ramp-up costs, before a potential capex 'digestion' cycle hits?
PREVAILING SENTIMENT
The rolling 12-month book-to-bill ratio of 1.1 and accelerating backlog growth (+31% YoY in Electrical Americas) indicate demand is still outpacing supply, supporting the bull case.
BEAR VIEW
Aggressive capacity expansion will cause near-term margin compression below guidance, a risk amplified if hyperscale customers pause capex, creating an air pocket in demand.
| Timeline | Event & Metric To Watch |
|---|---|
Late April 2026 | Q1 2026 Earnings Call Watch: Electrical Americas segment operating margin vs. guidance of 22.2%-22.6%. This is the first look at the impact of heavy 2026 ramp costs. |
April 2026 | Hyperscaler Earnings Calls (MSFT, GOOG, AMZN) Watch: Commentary on data center capex plans for the remainder of 2026. Watch for keywords like 'optimization', 'efficiency', or 'extending server life'. |
Next 3-6 Months | Mobility Spin-Off Registration Filing (Form 10) Watch: Financial details and pro-forma statements for the spun-off entity. This will clarify the attractiveness of the remaining pure-play Eaton. |
Next 6+ Months (Slow Burn) | EPA Regulatory Update on PFAS Watch: Any specific mention of electrical components (switchgear, insulation) as a category of concern for PFAS chemicals. |
| Date | Event | Stock Impact |
|---|---|---|
Aug 5, 2025 | Q2 2025 Earnings Report Details: Despite beating estimates, the stock fell sharply as investors focused on a sales drop in the vehicle business, highlighting the drag from the legacy segment. | Plummeted -7.4% $382.60 -> $354.45 |
Aug 12, 2025 | Major Aerospace Contract Win Details: Announced a long-term contract with a major aircraft OEM, boosting the Aerospace segment's backlog and providing enhanced revenue visibility. | Modest 0.9% gain $359.13 -> $362.31 |
Sep 10, 2025 | Strategic Update on Capacity Expansion Details: Management detailed plans for a $1.5B capital investment to increase manufacturing capacity, primarily to meet surging demand from data center and utility customers. | Rose significantly by 4.0% $347.29 -> $361.27 |
Nov 4, 2025 | Q3 2025 Earnings Report Details: Posted record Q3 results and reaffirmed full-year adjusted EPS guidance, noting a reacceleration of growth for the company. | Fell notably by -2.3% $385.52 -> $376.70 |
Jan 26, 2026 | Mobility Business Spin-Off Announcement Details: Formally announced its intent to spin off the Vehicle and eMobility segments into a separate, publicly traded company. The transaction is expected to complete by Q1 2027. | Flat (0.3%) $331.22 -> $332.28 |
Feb 3, 2026 | Q4 2025 Earnings & Mobility Spin-Off Update Details: Reported record results, with data center orders up ~200%. Despite the beat, stock was flat as 2026 guidance was seen as conservative. Provided more detail on Mobility spin-off. | Flat (0.7%) $362.53 -> $365.00 |
Position Sizing
4%-6%
NORMAL
Volatility is moderate, not explosive. The fundamental picture is strong with a Bullish sentiment and high visibility, but this is balanced by an expensive valuation, preventing a maximum allocation.
Diversification Alternatives
VRT
INDUSTRYVRT offers a more concentrated pure-play exposure to the data center thermal and power management growth vector, which is Eaton's primary driver, but without the legacy vehicle drag.
SU.PA
INDUSTRYSchneider Electric provides similar diversified exposure to electrification trends but with a stronger global footprint outside of the Americas, offering a geographic diversification benefit.
Eaton is re-rating from a cyclical industrial manufacturer to a secular growth company driven by the electrification, digitalization, and energy transition megatrends, with a backlog providing significant revenue visibility.
Filter all news through the lens of backlog growth and margin execution in the Electrical and Aerospace segments, which are the core drivers of the re-rating thesis.
Book-to-bill ratio consistently above 1.1 in Electrical and Aerospace segments; accelerating organic growth in data center and utility end-markets; sustained segment margin expansion above 24%; strategic acquisitions in high-growth areas like power distribution and grid modernization.
Book-to-bill falling below 1.0 for more than two consecutive quarters; significant project delays or cancellations from hyperscale or utility customers; margin compression due to inability to offset inflation or ramp-up costs; a downturn in the commercial aerospace cycle.
Minor quarterly fluctuations in the Vehicle and eMobility segments; general industrial production indices (PMI); short-term commodity price swings (copper, steel) unless they cause sustained, unrecoverable margin pressure.
Repricing Catalyst
The primary catalyst is the sustained, high-growth backlog driven by massive investments in data centers (AI-driven), grid modernization, and commercial aerospace. The Electrical Americas backlog grew 31% YoY to a record $13.2 billion in Q4 2025. This, combined with a total company book-to-bill ratio of 1.1, provides strong visibility into future revenue and earnings growth, justifying a higher valuation multiple.
Electrical Americas
$14.0B TTM (49% of Total) · 29.8% MarginWhat It Is
Switchgear, circuit breakers, uninterruptible power systems (UPS), power distribution units (PDUs), transformers, and software like Brightlayer for power monitoring.
Who Pays & How
Utilities, data centers (hyperscalers), commercial and industrial building owners pay for critical power distribution and protection. Customers like Hartsfield-Jackson Atlanta Airport and NY CREATES' semiconductor facility pay for resilient energy infrastructure to ensure uptime and safety. Lock-in is achieved through deep integration into building and grid infrastructure, high switching costs, and long-term service contracts.
Competition
Electrical Global
$6.8B TTM (24% of Total) · 21.5% MarginWhat It Is
Similar to Electrical Americas, but tailored to international standards (e.g., IEC); includes brands like MEM and Holec.
Who Pays & How
Industrial, commercial, and residential customers in EMEA and APAC for power distribution, circuit protection, and backup power.
Competition
Aerospace
$4.4B TTM (15% of Total) · 24.1% MarginWhat It Is
Fuel systems, hydraulic systems, motion control systems, and engine solutions for commercial and military aircraft.
Who Pays & How
Aircraft OEMs (e.g., Boeing, Airbus) and defense contractors pay for highly engineered, safety-critical components specified into long-life platforms. Airlines pay for higher-margin aftermarket parts and services.
Competition
Vehicle & eMobility
$2.8B TTM (10% of Total) · 15.3% MarginWhat It Is
Transmissions, clutches, and powertrain components for commercial trucks (Vehicle); inverters, converters, and power distribution units for electric vehicles (eMobility).
Who Pays & How
Commercial truck OEMs (e.g., PACCAR, Daimler) and automotive OEMs for powertrain and EV components.
Competition
External Quote Links
| Y Finance | Barrons |
| TradingView | Morningstar |
| SeekingAlpha | ValueLine |
| Motley Fool | Robinhood |
| CNBC | Etrade |
| MarketWatch | Unusual Whales |
| YCharts | Perplexity Finance |
| FinViz |
Prefer one of these to Trefis? Tell us why.