Eaton Corporation plc (ETN)
Valuation Overview•Is Eaton Corporation plc Overvalued or Undervalued?
Trading at a discount compared to peers, but the underlying intrinsic cash flows struggle to support the current price.
Moderate quality score of 65/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
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Verdict: Solid fundamental quality, though profitability presents a headwind.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. This is paired with healthy capital returns, driven predominantly by aggressive share repurchases.
ETN demonstrates adequate business quality with stable profitability. This is paired with a moderately leveraged but stable balance sheet.
The company demonstrates solid revenue growth (9.8% 3Y CAGR) paired with robust earnings compounding (19.4% EPS 3Y CAGR). The company maintains healthy operational efficiency with a 17.3% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $8.9B | +10.3% | +9.8% | +9.0% | +2.8% | |
| EBITDA | $1.6B | — | +14.1% | — | — | |
| Net Income | $1.1B | +7.8% | +18.4% | — | +7.5% | |
| EPS (Diluted) | $2.77 | +10.1% | +19.4% | +24.5% | +9.5% | |
| Free Cash Flow | $1.0B | +1.0% | +22.5% | +6.8% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 35.0% | 37.4% | 35.5% | 33.9% |
| Operating Margin | 17.3% | 18.6% | 17.2% | 15.3% |
| Net Margin | 12.2% | 14.7% | 13.4% | 11.9% |
| FCF Margin | 13.6% | 13.1% | 11.4% | 11.5% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q4'26Latest | $3.54 | $3.68 | +4.0% | ||
| Q3'26 | $3.07 | $3.15 | +2.6% | ||
| Q2'26 | $2.73 | $2.81 | +2.9% | ||
| Q1'26 | $3.31 | $3.33 | +0.6% | ||
| Q4'25 | $3.05 | $3.07 | +0.7% | ||
| Q3'25 | $2.93 | $2.95 | +0.7% | ||
| Q2'25 | $2.71 | $2.72 | +0.4% | ||
| Q1'25 | $2.82 | $2.83 | +0.4% |
Total return is -8.3% (1Y), lagging the benchmark by -18.0%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +5.4% | -2.2% | — |
| 1Y | -8.3% | -18.0% | +1.1% |
| 3YCAGR | +17.7% | -3.0% | +5.2% |
| 5YCAGR | +15.7% | +5.3% | +10.7% |
| 10YCAGR | +19.6% | +5.9% | — |
The S&P 500 is at 29.9x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Eaton Corporation plc (ETN) valuation, health, and returns.
Eaton Corporation plc is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Slightly cheap versus peers compared to industry peers. overvalued (implying -30.6% downside from DCF intrinsic value of $237.22)
Eaton Corporation plc has multiple valuation anchors: DCF Intrinsic Value: $237.22 | Peer Relative Fair Value: $382.81 | Wall Street Analyst Target: $500.75 (implying +46.5% upside). A convergence of these signals offers higher conviction.
Eaton Corporation plc displays good financial health with a composite quality score of 65/100, supported by a Altman Z-Score of 4.9 (safe zone), Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of 13.6%.
Eaton Corporation plc pays a 1.2% dividend yield, covered by a 40% payout ratio with 16 years of growth, supplemented by a 1.4% buyback yield.
Eaton Corporation plc's current growth trajectory is Stable. The company achieved +10.3% 1Y revenue growth and +10.1% 1Y EPS growth, compared to its 3Y revenue CAGR of +9.8%.
Wall Street consensus is Buy based on 40 analysts, beating EPS expectations in 100% of recent quarters with a 27-quarter streak. The consensus price target represents a +46.5% change from current levels.
Investment risks for Eaton Corporation plc include: -28.9% 1-year max drawdown, high beta (1.76x market volatility). Volatility risk is characterized by a beta of 1.76x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.