Eaton (ETN)
Industrials · $138B market cap · SEC CIK 0001551182
ahead of 42% of the S&P 500 · #45 of 79 in Industrials
Next reports on Feb 1, 2027, after the close, with analysts expecting $4.17 in earnings per share.
52-week range $311.92 to $478.00. 26% below its 52-week high and 14% above its low.
The case for ETN
- Revenue up 20.1% on the year.
- Return on equity of 19%.
- Pays a modest 1.5% dividend.
The case against
- The price trend is weak (28/100): −3.9% over a year, −19.3% over three months, 26% below its 52-week high.
- Long-term debt of $9.9B against $622M of cash.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Industrials companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 58 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 68 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 49 |
| Momentumhow the price has behaved lately | 28 |
| Stabilityhow violently it moves, what it owes and what it pays you | 64 |
- Each factor except momentum is half fixed thresholds, half rank among the 79 Industrials companies.
The financials
Revenue growth
Is the business growing? Yes
| Last 12 months | +20.1% |
|---|---|
| Over 5 years | +9.0% a year |
| FY2025 revenue | $27.4B (+10%) |
Free cash flow
Is it generating real cash? Yes
| FY2025 free cash flow | $3.6B |
|---|---|
| Of revenue | 13% |
| Of profit | 87% |
Profit margins
Is profitability improving? No, slipping
| Gross margin | 35% |
|---|---|
| Operating margin | 17% |
| Net margin, FY24 → FY25 → now | 15.3% → 14.9% → 12.2% |
Debt vs. cash
Is the balance sheet healthy? Yes, the debt is manageable
| Cash | $622M |
|---|---|
| Long-term debt | $9.9B |
| Net debt | $9.3B |
| Years to repay | 2.2 yrs |
Valuation
Is the stock price reasonable? Yes, about fair
| P/E | 35.3× |
|---|---|
| Fair P/E for its growth | 37× |
| P/FCF | 38.7× |
| Forward P/E | 23.6× |
| EV / EBITDA | 22.8× |
At 35.3× earnings it trades close to the 37× that 18% a year of growth plus a 1.5% dividend would justify. At 38.7× free cash flow it trades close to that same mark.
The financials, five years deep
Pulled from Eaton's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $27.4B | $24.9B | $23.2B | $20.8B | $19.6B |
| Change on the year | +10% | +7% | +12% | +6% | — |
| Free cash flow | |||||
| Free cash flow | $3.6B | $3.5B | $2.9B | $1.9B | $1.6B |
| Of revenue | 13% | 14% | 12% | 9% | 8% |
| Profit margins | |||||
| Net margin | 14.9% | 15.3% | 13.9% | 11.9% | 10.9% |
| Debt vs. cash | |||||
| Cash | $622M | $555M | $488M | $294M | $297M |
| Long-term debt | $9.9B | $9.2B | $9.3B | $8.3B | $8.6B |
| Net cash (debt) | −$9.3B | −$8.6B | −$8.8B | −$8.0B | −$8.3B |
What Eaton says it does
Eaton Corporation plc (Eaton or the Company) is an intelligent power management company dedicated to protecting the environment and improving the quality of life for people everywhere. We make products for the data center, utility, industrial, commercial, machine building, residential, aerospace and mobility markets. We are capitalizing on the megatrends of the electrification, digitalization, and the reindustrialization of and growth of megaprojects in North America and increased global infrastructure spending, all of which are expanding our end markets and positioning Eaton for growth for years to come. We are strengthening our participation across the entire electrical power value chain and benefiting from momentum in the data center and utility end markets as well as a growth cycle in the commercial aerospace and defense markets. We are guided by our commitment to operate sustainably and with the highest ethical standards. Our work…
Risk factors ETN lists in its 10-K
- We are subject to risks relating to acquisitions, joint ventures and investments, and risks relating to the integration of acquired companies
- Our operations depend on production facilities throughout the world, which subjects them to varying degrees of risk
- Significant inflation or shortages of raw materials, energy, components, and/or labor, or similar challenges for our customers, could continue to adversely impact our results of operations
- We rely on suppliers to provide raw materials, components, and services
- Risks and uncertainties related to the development and use of artificial intelligence may present business, compliance and reputational risks
- Weather disruptions and regulatory, market and social reactions to them create uncertainties that could negatively impact our business
- Our ability to identify, attract, develop, engage, and retain qualified employees could affect our ability to execute our strategy
- Technology disruption may impact our stock price and/or negatively impact our end markets
- Volatility of end markets that we serve could materially and adversely affect our business, financial condition and results of operations
- Our operating results depend in part on continued successful research,
- development, and marketing of new and/or improved products and services, and
- there can be no assurance that we will continue to successfully introduce
- new products and services or maintain present market positions
- We are exposed to geopolitical, economic and other risks that arise from uncertainty in worldwide and regional economic conditions
- Operating globally subjects us to risks and events beyond our control in countries where we operate
- Changes in countries' trade policies globally, including imposition of sanctions or tariffs, may have a material adverse impact on our business and results of operations
- We are subject to risks relating to changes in our tax rates, changes in global tax laws and regulations, or exposure to additional income tax liabilities
- As a provider of products to the U.S. government, we are subject to certain rules, regulations, audits and investigations and enhanced compliance risks
- We may be unable to adequately protect our intellectual property rights,
- which could affect our ability to compete
- We are subject to litigation and environmental regulations that could