Eaton Corporation plc

Eaton Corporation plc

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Market Cap$163.77B
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P/E RatioDividendsReturn on EquityPrice-to-SalesDebt-to-Equity
Eaton Corporation plcEaton Corporation plc41.11.01%20%61.1

Earnings Call Q1 2026

May 5, 2026 - AI Summary

Record performance in Q1; strong demand and backlog momentum - Eaton reported record Q1 revenue of $7.5B and record Q1 segment profit of $1.7B (22.7% margins), beating adjusted EPS expectations. - Adjusted EPS: $2.81 (Q1 record), $0.06 above the midpoint of guidance. - Organic growth: 10%; total revenue growth: +17%. - Free cash flow: up 245% YoY (strong cash generation). - Demand strength was emphasized with rolling 12-month orders up 42% in Electrical Americas and up 13% in both Electrical Global and Aerospace, pushing backlogs to new records and book-to-bill up to 1.2 (combined, rolling 12 months).
2026 outlook upgraded (growth and EPS), but margin is temporarily pressured - Organic growth outlook raised by 200 bps to midpoint 10% (range 9%–11%). - Adjusted EPS guidance raised to $13.28 midpoint (range $13.05–$13.50), explicitly incorporating the full Q1 beat and EPS dilution from the Boyd acquisition. - Tariff impacts included but deemed immaterial in the guidance. - Cash flow expectations reaffirmed for the year (no reduction in cash expectations). - Key margin challenge: full-year segment margin guide revised lower to 24.1%–24.5% (50 bps lower than prior), mainly due to Electrical Americas Q1 margin headwinds.
Electrical Americas: Q1 margin miss is framed as temporary; investors are being asked to look to 2H for recovery - Electrical Americas delivered strong growth (organic sales +14%) and record orders/backlog, but Q1 margin came in below expectations. - Management attributes margin pressure to two temporary factors: - Price/cost lag tied to early-year commodity inflation; expects April 1 pricing actions to more than offset in the full year. - Accelerated ramp-up costs in Q1 to support higher volume (management moved target growth mindset from 10% midpoint to ~13%, requiring more fixed/start-up/ramp cost before volume catches up). - Confidence on trajectory to 32% segment margin by 2030, with expectations of sequential margin improvement starting in Q2 and exit rates into 2H. - They reiterated the target to exit 2026 with Electrical Americas margins “north of 30%.”

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$469.00

Target Price by Analysts

7.6% upsideEaton plc Target Price DetailsTarget Price
$160.55

Current Fair Value

63.2% downside

Overvalued by 63.2% based on the discounted cash flow analysis.

Share Statistics

Market cap$163.77 Billion
Enterprise Value$185.04 Billion
Dividend Yield$4.28 (1.01%)
Earnings per Share$10.49
Beta1.19
Outstanding Shares388,200,000

Return

Return on Equity20.19%ROE
Return on Assets7.24%
Return on Invested Capital11.50%

Valuation & Multiples

P/E Ratio41.11P/E Ratio
PEG-404.37PEG
Price to Sales5.97Price to Sales
Price to Book Ratio8.72Price to Book Ratio
Enterprise Value to Revenue6.49
Enterprise Value to EBIT37.13
Enterprise Value to Net Income46
Total Debt to Enterprise0.12
Debt to Equity1.1Debt to Equity

Revenue Sources

No data

Insider Trades

Last Earnings Call

Report Date
May 5, 2026
EPS Estimate
$2.73
Average shareholder expectation
Revenue Estimate
$7.14 B
Average shareholder expectation

Next Earnings Call

Expected Date
August 4, 2026
EPS Estimate
$3.07
Average shareholder expectation
Revenue Estimate
$8.16 B
Average shareholder expectation

Institutional Put/Call Ratio

Market sentiment based on institutional option activity.

Put/Call Ratio0.9429 20.30%
Total Calls3,701,670 26.84%
Total Puts3,490,281 4.37%

Institutional Ownership

Holdings and activity of institutional investors.

Ownership %83.91% 14.03%
Total Invested$116.04B 13.32%
Investors Holding2,577 48.00%

ESG Score

No data

About Eaton Corporation plc

CEO: Craig Arnold

Relevant Senate Committees

Joint Committee on Taxation

This committee provides critical analysis and revenue estimates for all tax legislation. Its work directly influences the specifics of corporate tax structures, capital investment credits, and other fiscal policies that have a substantial financial impact on Eaton as a large manufacturing entity.

Finance

As the primary tax-writing committee, Finance directly impacts Eaton's corporate tax burden, investment incentives, and overall profitability through tax policy. Its influence on trade policy (tariffs, agreements) also significantly affects Eaton's global supply chain and market access.

Appropriations

The Appropriations Committee directly allocates federal discretionary spending. Eaton benefits from federal funding for defense programs (aerospace segment), infrastructure projects (electrical systems), and energy efficiency initiatives, making this committee a direct determinant of potential government contracts and revenue.

Armed Services

Eaton's aerospace segment is a significant supplier to the defense industry, providing components for military aircraft and systems. This committee's authorization of the NDAA and oversight of the Department of Defense directly impacts Eaton's defense-related revenue and R&D funding opportunities.

Commerce, Science, and Transportation

This committee's broad jurisdiction over interstate commerce, manufacturing standards, and the FAA is highly relevant. Eaton's aerospace segment is directly affected by FAA regulations, and general commerce laws impact all aspects of its U.S. business.

Energy and Natural Resources

Eaton is a power management company. This committee's oversight of national energy policy, renewable energy initiatives, and regulations affecting utilities (Eaton's customers) directly impacts the market for Eaton's electrical and energy efficiency products.

Environment and Public Works

Eaton's products are integral to infrastructure development (electrical grid, smart buildings) and environmental management. Regulations from the EPA or federal investment in infrastructure projects directly affect demand for Eaton's equipment and its manufacturing processes.

Homeland Security and Governmental Affairs

As a manufacturer of electrical systems and power management solutions, Eaton frequently engages in federal contracting and procurement, which this committee directly oversees. Changes in government efficiency or procurement policies would directly impact Eaton's revenue streams from federal projects.