Eaton (ETN)
Market Price (4/7/2026): $363.99 | Market Cap: $141.4 BilSector: Industrials | Industry: Electrical Components & Equipment
Eaton (ETN)
Market Price (4/7/2026): $363.99Market Cap: $141.4 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 16%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 13%, CFO LTM is 4.5 Bil, FCF LTM is 3.6 Bil Low stock price volatilityVol 12M is 34% Megatrend and thematic driversMegatrends include Smart Grids & Grid Modernization, Renewable Energy Transition, Electric Vehicles & Autonomous Driving, Sustainable & Green Buildings, Show more. | Weak multi-year price returns2Y Excs Rtn is -6.5% | Expensive valuation multiplesP/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 32x 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. |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 16%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 13%, CFO LTM is 4.5 Bil, FCF LTM is 3.6 Bil |
| Low stock price volatilityVol 12M is 34% |
| Megatrend and thematic driversMegatrends include Smart Grids & Grid Modernization, Renewable Energy Transition, Electric Vehicles & Autonomous Driving, Sustainable & Green Buildings, Show more. |
| Weak multi-year price returns2Y Excs Rtn is -6.5% |
| Expensive valuation multiplesP/CFOPrice/(Cash Flow from Operations). CFO is cash before capital expenditures. is 32x |
| 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. Strong Demand and Record Backlog in Electrical Segments: Eaton reported record fourth-quarter 2025 adjusted EPS of $3.33, an 18% increase year-over-year, alongside 9% organic growth. Orders for Electrical Americas surged 16% in Q4 2025, driven by an approximately 200% increase in data center orders, leading to a record total backlog of $19.6 billion, up 29% year-over-year. The company projects full-year 2026 organic growth of 7-9% and adjusted EPS of $13.00-$13.50, a 10% increase at the midpoint from 2025. This strong outlook is supported by robust demand in the broader industrial sector, which showed renewed momentum in Q1 2026, with manufacturing remaining on solid footing.
2. Strategic Expansion into High-Growth AI Data Center and Electrification Markets: Eaton significantly bolstered its position in critical high-growth areas through strategic moves. In February 2026, it completed the acquisition of Boyd Thermal, a leader in liquid cooling solutions, enhancing its "grid-to-chip" data center capabilities. Furthermore, in March 2026, Eaton collaborated with NVIDIA to introduce the Eaton Beam Rubin DSX platform, integrating its power and cooling infrastructure with NVIDIA's AI factory design, thereby deepening its ties to the burgeoning AI data center market. The company is also addressing residential electrification through a partnership with SPAN, developing smart electrical panels for home power management.
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Stock Movement Drivers
Fundamental Drivers
The 14.6% change in ETN stock from 12/31/2025 to 4/6/2026 was primarily driven by a 10.0% change in the company's P/E Multiple.| (LTM values as of) | 12312025 | 4062026 | Change |
|---|---|---|---|
| Stock Price ($) | 317.52 | 363.89 | 14.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 26,633 | 27,448 | 3.1% |
| Net Income Margin (%) | 14.7% | 14.9% | 1.0% |
| P/E Multiple | 31.4 | 34.6 | 10.0% |
| Shares Outstanding (Mil) | 389 | 388 | 0.1% |
| Cumulative Contribution | 14.6% |
Market Drivers
12/31/2025 to 4/6/2026| Return | Correlation | |
|---|---|---|
| ETN | 14.6% | |
| Market (SPY) | -5.4% | 52.0% |
| Sector (XLI) | 6.1% | 72.1% |
Fundamental Drivers
The -2.2% change in ETN stock from 9/30/2025 to 4/6/2026 was primarily driven by a -6.5% change in the company's P/E Multiple.| (LTM values as of) | 9302025 | 4062026 | Change |
|---|---|---|---|
| Stock Price ($) | 372.08 | 363.89 | -2.2% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 25,990 | 27,448 | 5.6% |
| Net Income Margin (%) | 15.1% | 14.9% | -1.4% |
| P/E Multiple | 37.0 | 34.6 | -6.5% |
| Shares Outstanding (Mil) | 390 | 388 | 0.5% |
| Cumulative Contribution | -2.2% |
Market Drivers
9/30/2025 to 4/6/2026| Return | Correlation | |
|---|---|---|
| ETN | -2.2% | |
| Market (SPY) | -2.9% | 59.0% |
| Sector (XLI) | 7.1% | 70.1% |
Fundamental Drivers
The 35.5% change in ETN stock from 3/31/2025 to 4/6/2026 was primarily driven by a 23.9% change in the company's P/E Multiple.| (LTM values as of) | 3312025 | 4062026 | Change |
|---|---|---|---|
| Stock Price ($) | 268.53 | 363.89 | 35.5% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 24,878 | 27,448 | 10.3% |
| Net Income Margin (%) | 15.3% | 14.9% | -2.3% |
| P/E Multiple | 27.9 | 34.6 | 23.9% |
| Shares Outstanding (Mil) | 394 | 388 | 1.5% |
| Cumulative Contribution | 35.5% |
Market Drivers
3/31/2025 to 4/6/2026| Return | Correlation | |
|---|---|---|
| ETN | 35.5% | |
| Market (SPY) | 16.3% | 72.3% |
| Sector (XLI) | 26.9% | 75.7% |
Fundamental Drivers
The 121.3% change in ETN stock from 3/31/2023 to 4/6/2026 was primarily driven by a 32.3% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 3312023 | 4062026 | Change |
|---|---|---|---|
| Stock Price ($) | 164.42 | 363.89 | 121.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 20,752 | 27,448 | 32.3% |
| Net Income Margin (%) | 11.9% | 14.9% | 25.6% |
| P/E Multiple | 26.6 | 34.6 | 30.0% |
| Shares Outstanding (Mil) | 398 | 388 | 2.5% |
| Cumulative Contribution | 121.3% |
Market Drivers
3/31/2023 to 4/6/2026| Return | Correlation | |
|---|---|---|
| ETN | 121.3% | |
| Market (SPY) | 63.3% | 67.2% |
| Sector (XLI) | 69.7% | 70.6% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| ETN Return | 47% | -7% | 56% | 40% | -3% | 14% | 228% |
| Peers Return | 14% | 7% | 22% | 31% | 20% | 8% | 153% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | -4% | 75% |
Monthly Win Rates [3] | |||||||
| ETN Win Rate | 75% | 25% | 67% | 75% | 50% | 75% | |
| Peers Win Rate | 60% | 45% | 48% | 58% | 58% | 75% | |
| 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% | -2% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -7% | |
[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 4/6/2026 (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.
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About Eaton (ETN)
AI Analysis | Feedback
Here are 1-3 brief analogies to describe Eaton (ETN):
- It's like the "Intel Inside" for the essential power management and motion systems in everything from electrical grids to airplanes.
- Imagine a highly diversified industrial technology company, similar to a B2B version of Bosch, specializing in the electrical and hydraulic components that power factories, aircraft, and vehicles.
- A crucial supplier of the fundamental power electronics and controls for electric vehicles, playing a "behind-the-scenes" role much like NVIDIA does for AI computing.
AI Analysis | Feedback
- **Electrical Distribution and Control Equipment:** Includes electrical components, industrial components, power distribution and assemblies, residential products, wiring devices, and circuit protection.
- **Power Quality and Reliability Solutions:** Provides single and three phase power quality, connectivity products, utility power distribution, and power reliability equipment.
- **Specialized Electrical and Safety Systems:** Offers hazardous duty electrical equipment, emergency lighting, fire detection, explosion-proof instrumentation, and structural support systems.
- **Aerospace Hydraulic and Fluid Systems:** Covers pumps, motors, hydraulic power units, hoses, fittings, valves, cylinders, and electro-hydraulic pumps.
- **Aerospace Aircraft Systems:** Provides electronic controls, electromechanical actuators, sensors, aircraft flap and slat systems, nose wheel steering systems, air-to-air refueling, fuel systems, oxygen generation, and thermal management products.
- **Aerospace Wiring and Filtration:** Includes wiring connectors and cables, as well as hydraulic and bag filters, strainers, and cartridges.
- **Vehicle Powertrain and Drivetrain Components:** Manufactures transmissions, clutches, hybrid power systems, superchargers, engine valves, valve actuation systems, locking and limited slip differentials, and transmission controls.
- **eMobility Power Electronics and Systems:** Delivers voltage inverters, converters, fuses, onboard chargers, circuit protection units, vehicle controls, power distribution systems, and commercial vehicle hybrid systems.
- **Golf Grips:** A product line for manufacturers of golf equipment.
AI Analysis | Feedback
```htmlEaton (ETN) primarily sells its products and services to other companies (B2B) across a diverse range of industries. While specific "major customers" (accounting for a significant portion of revenue) are not disclosed in the provided background, the company description clearly indicates the types of businesses and sectors it serves. Therefore, its customers are generally other companies operating in these sectors. Examples of such companies include:
- Aerospace and Defense Manufacturers: Companies that build commercial and military aircraft, and related after-market services.
- Automotive and Commercial Vehicle Manufacturers: Companies that produce cars, trucks, buses, and off-highway vehicles, including electric vehicles for the eMobility segment.
- Industrial, Utility, and Construction Companies: Entities involved in manufacturing, power generation, transmission, distribution, data centers, and various construction projects.
- Examples: Utilities such as Duke Energy (DUK), large industrial manufacturers, electrical contractors, and data center operators.
AI Analysis | Feedback
nullAI Analysis | Feedback
Paulo Ruiz, Chief Executive Officer
Paulo Ruiz will assume the role of Chief Executive Officer of Eaton on June 1, 2025. He was appointed President and Chief Operating Officer on September 2, 2024, at which time he also joined the company's board of directors. Prior to this, Ruiz served as president and chief operating officer of Eaton's Industrial Sector, overseeing businesses such as Aerospace, Vehicle, Mobility, Filtration, and Golf Pride, as well as operations in the Asia-Pacific, Central, and South American regions. His earlier roles at Eaton include leading the Energy Solutions and Services business in the Americas and serving as President of the Hydraulics Group. Before joining Eaton in 2019, Ruiz held various strategic positions globally with Siemens, including serving as CEO of Dresser–Rand.
David Foster, Executive Vice President and Chief Financial Officer
David Foster was appointed Executive Vice President and Chief Financial Officer, effective March 2, 2026. He rejoined Eaton after a 29-year career with the company, having retired in 2022. During his extensive tenure at Eaton, he held numerous senior finance positions across the company's finance organization in the Asia Pacific region and the United States. His responsibilities included financial planning and analysis, controllership, corporate development, treasury, and mergers and acquisitions. His last role before retiring in 2022 was senior vice president, Finance and Planning, Industrial Sector.
Heath Monesmith, President and Chief Operating Officer, Electrical Sector
Heath Monesmith serves as President and Chief Operating Officer of Eaton’s Electrical Sector. In this capacity, he is responsible for the company's global electrical business and has corporate responsibility for the Europe, Middle East, and Africa region. Prior to his current role, Monesmith was president and chief operating officer for Eaton's Industrial Sector. Before leading the Industrial Sector, he served as Executive Vice President and General Counsel for Eaton, overseeing all legal matters and advising the Board of Directors. Monesmith joined Eaton in 2012 as part of the Cooper Industries acquisition, where he had previously held roles including vice president, chief legal counsel, Litigation, and executive vice president, Human Resources.
Peter Denk, President and Chief Operating Officer, Industrial Sector
Peter Denk is set to become President and Chief Operating Officer of Eaton's Industrial Sector, effective January 1, 2025. In this role, he will oversee the Aerospace, Mobility, Filtration, and Golf Pride businesses. Denk joined Eaton in 2018 and most recently served as president of the Mobility Group. Prior to his time at Eaton, he gained nearly 20 years of experience in various leadership roles at Robert Bosch LLC.
AI Analysis | Feedback
One key risk to Eaton's business is the accelerating global shift away from internal combustion engine (ICE) vehicles towards electric vehicles (EVs). Eaton's Vehicle segment provides transmissions, clutches, superchargers, engine valves, and other components primarily for traditional vehicle powertrains. As the automotive industry transitions to EVs, demand for these ICE-specific components may significantly decline, impacting a substantial part of Eaton's vehicle-related business.
AI Analysis | Feedback
The accelerated global shift towards electric vehicles (EVs) presents a clear emerging threat to Eaton's Vehicle segment. Many of the products listed within this segment, such as transmissions, clutches, superchargers, and engine valves, are primarily designed for internal combustion engine (ICE) vehicles. As the automotive industry increasingly transitions to electric powertrains, the demand for these ICE-specific components will significantly decline, potentially rendering a substantial portion of the Vehicle segment's product portfolio obsolete.
AI Analysis | Feedback
Eaton (symbol: ETN) operates in diverse power management markets. The addressable market sizes for its main products and services, where available, are detailed below:
-
Electrical Americas and Electrical Global Segments:
- Electrical components and Industrial components: The global industrial electrical component market size was valued at USD 528.22 billion in 2024. Other estimates for the global industrial electrical component market include USD 63.49 billion in 2025, projected to reach USD 162.41 billion by 2034, and USD 57.20 billion in 2025, expected to reach USD 90.48 billion by 2030. The broader electrical components market is estimated to reach USD 1,575.92 billion by 2031.
- Power distribution and assemblies / Utility power distribution products: The global power distribution component market size was estimated at USD 287.7 billion in 2024 and is projected to reach USD 613.2 billion by 2034. The global electric power transmission and distribution equipment market size was valued at USD 259.98 billion in 2025 and is set to surpass USD 483.46 billion by 2035.
- Power quality and connectivity products: null
- Circuit protection products: The global circuit protection market size was valued at USD 57.10 billion in 2024 and is expected to reach USD 94.84 billion by 2033. Another estimate for the global circuit protection market size was USD 58.76 billion in 2025, projected to reach USD 64.43 billion in 2026.
- Emergency lighting: The global emergency lighting market size was valued at USD 8.45 billion in 2025 and is projected to grow to USD 15.66 billion by 2034. Another report indicated the global emergency lighting market size was USD 7.5 billion in 2023 and is expected to reach USD 19 billion by 2032.
- Fire detection: null
-
Aerospace Segment:
- Pumps, motors, hydraulic power units, valves, cylinders, electronic controls, electromechanical actuators, sensors, aircraft flap and slat systems, and nose wheel steering systems: null
- Hoses and fittings, thermoplastic tubing products, fittings, adapters, couplings, and sealing and ducting products: null
- Air-to-air refueling systems, fuel pumps, fuel inerting products, sensors, valves, and adapters and regulators (Aircraft Fuel Systems): The global aircraft fuel systems market size is calculated at USD 10.71 billion in 2025 and is predicted to increase to approximately USD 20.54 billion by 2035. Other sources indicated the global aircraft fuel system market size was valued at USD 10.6 billion in 2024, projected to reach USD 17.3 billion by 2034, and USD 10.33 billion in 2025, projected to grow to USD 17.89 billion by 2034.
- Oxygen generation system, payload carriages, and thermal management products: null
- Wiring connectors and cables: null
- Hydraulic and bag filters, strainers and cartridges: null
-
Vehicle Segment:
- Transmissions: The global automotive transmission market size was valued at USD 207.30 billion in 2025 and is projected to grow to USD 495.54 billion by 2034. The global automotive gear transmission market size was valued at USD 142.5 billion in 2025 and is projected to reach USD 218.4 billion by 2034.
- Clutches: The global automotive clutch market size was valued at USD 23.32 billion in 2025, projected to reach USD 32.17 billion by 2031. Other estimates for the global automotive clutch market include USD 14.96 billion in 2025, projected to reach USD 21.27 billion by 2034, and USD 15.39 billion in 2026, expected to reach USD 20.51 billion by 2031.
- Hybrid power systems: null
- Superchargers: The global automotive supercharger market size is estimated to be valued at USD 9.0 billion in 2025 and is projected to reach USD 14.5 billion by 2035. Other figures for the global automotive supercharger market include USD 8.82 billion in 2025, growing to USD 12.43 billion by 2031, and USD 8.73 billion in 2025, projected to grow to USD 14.33 billion by 2034.
- Engine valves and valve actuation systems: The global automotive valves market size was valued at USD 26.6 billion in 2023, and is projected to reach USD 51.9 billion by 2033. More specifically, the global automotive engine valve market size was estimated at USD 5.45 billion in 2024 and is projected to reach USD 8.32 billion by 2033.
- Locking and limited slip differentials (Automotive Differentials): The global automotive differential market was valued at USD 25.7 billion in 2025 and is expected to grow to USD 40.2 billion by 2035. Other reports indicated the global automotive differential market size was valued at USD 24.79 billion in 2024 and is projected to attain around USD 38.53 billion by 2034, and USD 23.9 billion in 2025, expected to reach USD 36.3 billion by 2034.
- Transmission controls: null
- Fuel vapor components: null
-
eMobility Segment:
- Voltage inverters, converters, fuses, onboard chargers, circuit protection units, vehicle controls, power distribution systems, fuel tank isolation valves, and commercial vehicle hybrid systems: null
AI Analysis | Feedback
Eaton (ETN) is expected to experience future revenue growth over the next 2-3 years driven by several key factors:
- Global Electrification and Digitalization Trends: Eaton is strategically positioned to capitalize on the increasing worldwide demand for electrification and digitalization. This includes accelerating the transition to renewable energy sources and addressing critical power management challenges, which are core to Eaton's intelligent power management solutions.
- Booming Data Center Demand, particularly driven by AI Infrastructure: There is exceptionally robust and accelerating demand from data centers, especially those supporting Artificial Intelligence (AI) projects. This trend significantly boosts demand for Eaton's electrical components and power quality products within its Electrical Americas and Electrical Global segments. Eaton has expanded its revenue opportunities per megawatt of data center capacity by moving into advanced "white space" and liquid cooling solutions for AI applications.
- North American Infrastructure Investment and Reshoring Initiatives: Major government initiatives in the United States, such as the CHIPS Act, the Infrastructure Investment and Jobs Act (IIJA), and the Inflation Reduction Act (IRA), are driving significant reindustrialization efforts and large-scale industrial and power projects. Eaton is well-positioned to benefit from these investments, leading to increased demand for its equipment and services.
- Strong and Growing Backlog: Eaton consistently reports a substantial and expanding backlog across its key segments, particularly in its Electrical and Aerospace businesses. This robust backlog provides strong visibility and a solid foundation for realizing future revenue growth.
AI Analysis | Feedback
Eaton (ETN) has made the following capital allocation decisions over the last 3-5 years:Share Repurchases
- Eaton authorized a new $9.0 billion share repurchase program in February 2025, with approximately $7.6 billion remaining available as of December 31, 2025.
- The company repurchased $1.9 billion in shares in 2025.
- In 2024, Eaton repurchased $2.492 billion in shares.
Share Issuance
- Eaton has not undertaken significant share issuance for capital raising purposes in the last 3-5 years. The number of shares outstanding decreased by 2.05% in 2025 and 0.42% in 2024, primarily reflecting the impact of share repurchases.
Outbound Investments
- Eaton has actively pursued strategic acquisitions, with major recent and planned investments including the agreement to acquire Boyd Thermal for $9.5 billion (expected Q2 2026) and the acquisition of Ultra PCS Limited for $1.53 billion (January 2026).
- Other significant acquisitions in the last 3-5 years include Fibrebond Corporation for $1.43 billion (March 2025), Resilient Power Systems (July 2025), Cobham Mission Systems for $2.83 billion (February 2021), and Tripp Lite for $1.65 billion (January 2021).
- The company also plans to spin off its Mobility business (Vehicle and eMobility segments) by the end of Q1 2027, focusing on its electrical and aerospace sectors.
Capital Expenditures
- Eaton's capital expenditures were $919 million in 2025 and $808 million in 2024.
- The company is investing $1.5 billion to ramp up capacity, with the majority of these investments expected to be complete in 2024 and 2025.
- The primary focus of these expenditures is to support growing demand, electrification, energy transition, digitalization, and expansion of production capacity across various markets, including a 10-year plan for $3 billion in R&D for sustainable products.
Latest Trefis Analyses
| Title | Date | |
|---|---|---|
| DASHBOARDS | ||
| Buying ETN at a Discount? You Are Getting Paid to Do It | 04/02/2026 | |
| How Does Eaton Stock Stack Up Against Its Peers? | 03/05/2026 | |
| Can Eaton Stock Recover If Markets Fall? | 03/05/2026 | |
| Nextpower vs Eaton: Which Is the Stronger Buy Today? | 03/04/2026 | |
| Eaton Earnings Notes | 12/27/2025 | |
| Eaton Stock Pulls Back to Support - Smart Entry? | 12/19/2025 | |
| Eaton vs Automatic Data Processing: Which Is A Better Investment? | 08/18/2025 | |
| Now Is Not The Time To Buy Eaton Stock | 08/14/2025 | |
| ARTICLES | ||
| Get Paid 8.9% to Buy ETN at a 30% Discount – Here’s How | 04/02/2026 | |
| Eaton Stock Drop Looks Sharp, But How Deep Can It Go? | 03/05/2026 | |
| Nextpower or Eaton: Which Stock Has More Upside? | 03/04/2026 | |
| Eaton Stock Pulls Back to Support – Smart Entry? | 12/19/2025 | |
| Can Eaton Outrun Woodward in the Next Rally? | 12/05/2025 |
Trade Ideas
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| 03312026 | NSP | Insperity | Insider | Insider Buys 45DStrong Insider BuyingCompanies with multiple insider buys in the last 45 days | 0.0% | 0.0% | 0.0% |
| 03312026 | TNC | Tennant | Insider | Insider Buys 45DStrong Insider BuyingCompanies with multiple insider buys in the last 45 days | 0.0% | 0.0% | 0.0% |
| 03272026 | ADP | Automatic Data Processing | 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 | 1.0% | 1.0% | 0.0% |
| 03272026 | HURN | Huron Consulting | 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 | 4.0% | 4.0% | 0.0% |
| 03272026 | TRU | TransUnion | 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 | 5.2% | 5.2% | 0.0% |
Research & Analysis
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Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 431.54 |
| Mkt Cap | 95.7 |
| Rev LTM | 23,955 |
| Op Inc LTM | 4,082 |
| FCF LTM | 2,957 |
| FCF 3Y Avg | 2,599 |
| 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 | 8.9% |
| QoQ Delta Rev Chg LTM | 1.8% |
| Op Mgn LTM | 19.4% |
| Op Mgn 3Y Avg | 18.3% |
| QoQ Delta Op Mgn LTM | 0.3% |
| CFO/Rev LTM | 16.9% |
| CFO/Rev 3Y Avg | 16.7% |
| FCF/Rev LTM | 14.3% |
| FCF/Rev 3Y Avg | 13.7% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 95.7 |
| P/S | 4.3 |
| P/EBIT | 21.8 |
| P/E | 31.4 |
| P/CFO | 25.2 |
| Total Yield | 4.2% |
| Dividend Yield | 0.9% |
| FCF Yield 3Y Avg | 3.8% |
| D/E | 0.1 |
| Net D/E | 0.1 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 0.6% |
| 3M Rtn | 5.9% |
| 6M Rtn | 18.5% |
| 12M Rtn | 54.7% |
| 3Y Rtn | 138.7% |
| 1M Excs Rtn | 0.7% |
| 3M Excs Rtn | 10.7% |
| 6M Excs Rtn | 18.8% |
| 12M Excs Rtn | 21.5% |
| 3Y Excs Rtn | 57.2% |
Comparison Analyses
Segment Financials
Assets by Segment| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Goodwill | 14,713 | 14,977 | 14,796 | 14,751 | 12,903 |
| Corporate | 5,833 | 6,243 | 3,929 | 3,906 | 4,099 |
| Electrical Americas | 4,933 | 4,163 | 3,655 | 3,002 | 2,333 |
| Other intangible assets | 4,658 | 5,091 | 5,485 | 5,855 | 4,175 |
| Electrical Global | 3,233 | 2,868 | 2,658 | 2,579 | 2,334 |
| Aerospace | 2,392 | 2,276 | 1,859 | 1,729 | 1,363 |
| Vehicle | 1,987 | 2,251 | 2,230 | 1,985 | 1,950 |
| eMobility | 633 | 563 | 402 | 220 | 180 |
| Assets held for sale | 2,487 | ||||
| Total | 38,382 | 38,432 | 35,014 | 34,027 | 31,824 |
Price Behavior
| Market Price | $363.89 | |
| Market Cap ($ Bil) | 141.3 | |
| First Trading Date | 06/01/1972 | |
| Distance from 52W High | -7.8% | |
| 50 Days | 200 Days | |
| DMA Price | $362.68 | $355.83 |
| DMA Trend | up | up |
| Distance from DMA | 0.3% | 2.3% |
| 3M | 1YR | |
| Volatility | 34.9% | 33.0% |
| Downside Capture | 0.22 | 0.80 |
| Upside Capture | 141.63 | 141.25 |
| Correlation (SPY) | 48.1% | 69.2% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 1.43 | 1.51 | 1.38 | 1.50 | 1.30 | 1.41 |
| Up Beta | 0.87 | 2.36 | 1.53 | 1.06 | 1.19 | 1.38 |
| Down Beta | 2.55 | 2.71 | 2.26 | 1.96 | 1.35 | 1.41 |
| Up Capture | 117% | 128% | 146% | 155% | 181% | 344% |
| Bmk +ve Days | 7 | 16 | 27 | 65 | 139 | 424 |
| Stock +ve Days | 12 | 23 | 35 | 66 | 132 | 408 |
| Down Capture | 95% | 70% | 53% | 129% | 120% | 108% |
| Bmk -ve Days | 12 | 23 | 33 | 58 | 110 | 323 |
| Stock -ve Days | 10 | 19 | 28 | 60 | 120 | 343 |
[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 | 29.9% | 34.3% | 0.81 | - |
| Sector ETF (XLI) | 25.1% | 19.5% | 1.03 | 75.6% |
| Equity (SPY) | 15.3% | 19.0% | 0.64 | 72.3% |
| Gold (GLD) | 49.6% | 28.0% | 1.44 | 10.3% |
| Commodities (DBC) | 15.5% | 17.7% | 0.74 | 23.5% |
| Real Estate (VNQ) | 3.1% | 16.5% | 0.01 | 36.1% |
| Bitcoin (BTCUSD) | -19.0% | 44.0% | -0.35 | 31.4% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ETN | |
|---|---|---|---|---|
| ETN | 23.3% | 29.2% | 0.75 | - |
| Sector ETF (XLI) | 12.5% | 17.2% | 0.57 | 74.3% |
| Equity (SPY) | 11.7% | 17.0% | 0.53 | 67.9% |
| Gold (GLD) | 21.8% | 17.8% | 1.01 | 7.6% |
| Commodities (DBC) | 11.6% | 18.8% | 0.50 | 16.2% |
| Real Estate (VNQ) | 3.4% | 18.8% | 0.09 | 41.0% |
| Bitcoin (BTCUSD) | 3.0% | 56.5% | 0.27 | 23.5% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ETN | |
|---|---|---|---|---|
| ETN | 22.4% | 29.6% | 0.74 | - |
| Sector ETF (XLI) | 13.5% | 19.9% | 0.60 | 80.4% |
| Equity (SPY) | 14.0% | 17.9% | 0.67 | 72.6% |
| Gold (GLD) | 14.0% | 15.9% | 0.73 | 1.9% |
| Commodities (DBC) | 8.4% | 17.6% | 0.39 | 26.9% |
| Real Estate (VNQ) | 5.1% | 20.7% | 0.21 | 51.0% |
| Bitcoin (BTCUSD) | 65.9% | 66.9% | 1.05 | 15.8% |
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Returns Analyses
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 2/3/2026 | 0.9% | 4.9% | -1.1% |
| 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 | 17 | 14 |
| # Negative | 11 | 7 | 10 |
| Median Positive | 3.6% | 4.9% | 9.6% |
| Median Negative | -2.3% | -3.4% | -5.3% |
| 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 |
|---|---|---|
| 12/31/2025 | 02/26/2026 | 10-K |
| 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 |
Recent Forward Guidance [BETA]
Latest: Q4 2025 Earnings Reported 2/3/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q1 2026 Organic Growth | 5.0% | 6.0% | 7.0% | -45.4% | -5.0% | Lowered | Guidance: 11.0% for Q4 2025 |
| Q1 2026 Segment Margins | 22.2% | 22.4% | 22.6% | -8.2% | -2.0% | Lowered | Guidance: 24.4% for Q4 2025 |
| Q1 2026 EPS | 2.29 | 2.39 | 2.49 | -16.1% | Lowered | Guidance: 2.85 for Q4 2025 | |
| Q1 2026 Adjusted EPS | 2.65 | 2.75 | 2.85 | -17.4% | Lowered | Guidance: 3.33 for Q4 2025 | |
| 2026 Organic Growth | 7.0% | 8.0% | 9.0% | -11.1% | -1.0% | Lowered | Guidance: 9.0% for 2025 |
| 2026 Segment Margins | 24.6% | 24.8% | 25.0% | 2.1% | 0.5% | Raised | Guidance: 24.3% for 2025 |
| 2026 EPS | 11.6 | 11.8 | 12.1 | 13.8% | Raised | Guidance: 10.4 for 2025 | |
| 2026 Adjusted EPS | 13 | 13.2 | 13.5 | 9.8% | Raised | Guidance: 12.1 for 2025 | |
Prior: Q3 2025 Earnings Reported 11/4/2025
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q4 2025 Organic growth | 10.0% | 11.0% | 12.0% | 29.4% | 2.5% | Higher New | Actual: 8.5% for Q3 2025 |
| Q4 2025 Segment margins | 24.2% | 24.4% | 24.6% | 0.4% | 0.1% | Higher New | Actual: 24.3% for Q3 2025 |
| Q4 2025 Earnings per share | 2.75 | 2.85 | 2.95 | 9.2% | Higher New | Actual: 2.61 for Q3 2025 | |
| Q4 2025 Adjusted earnings per share | 3.23 | 3.33 | 3.43 | 9.5% | Higher New | Actual: 3.04 for Q3 2025 | |
| 2025 Organic growth | 8.5% | 9.0% | 9.5% | 0.0% | 0.0% | Affirmed | Guidance: 9.0% for 2025 |
| 2025 Segment margins | 24.1% | 24.3% | 24.5% | 0.0% | 0.0% | Affirmed | Guidance: 24.3% for 2025 |
| 2025 Earnings per share | 10.3 | 10.4 | 10.5 | -1.1% | Lowered | Guidance: 10.5 for 2025 | |
| 2025 Adjusted earnings per share | 12 | 12.1 | 12.2 | 0.0% | Affirmed | Guidance: 12.1 for 2025 | |
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
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