ℹ️ How are these calculated?
🎯 Investment Thesis
Record Q4 2025 beat — one of three companies that "shattered quarterly records." HSBC upgraded to Buy ($400), RBC raised to $407 citing beat-and-raise potential despite conservative 2026 guidance. Eaton is the electrical backbone of data centers: switchgear, UPS, power distribution. Citi $435 is the bull case. More diversified than Vertiv with aerospace and industrial providing stability.
⚠️ Key Risk
Near ATH at 1.5% below — essentially at the top. 26x forward PE is high for a diversified industrial. Wells Fargo only $370 (Equal-Weight) — sees limited upside. JP Morgan and Morgan Stanley both recently LOWERED PTs ($406, $405). Conservative 2026 guidance suggests management sees deceleration. Not a pure-play — only ~25% DC revenue.
By The Numbers
Event Impact
Electrical infrastructure for data centers — switchgear, UPS, power distribution. DC is fastest-growing segment.
Aerospace/defense segment benefits from military spending.
No quantum relevance.
Reshoring tailwind for US electrical infrastructure.
~50% international revenue benefits from weaker dollar. At 26x PE, moderate sensitivity. $10B debt manageable with $3.5B FCF.
THE electrical infrastructure play. Switchgear, transformers, UPS, power distribution for every grid expansion project. Every new power plant, transmission upgrade, and grid modernization needs Eaton equipment.
Some government/defense electrical infrastructure contracts. IRA and grid spending provide fiscal tailwind. Aerospace segment tied to defense budgets.
Price Targets
Upcoming Catalysts
Competitive Landscape
Company Background
Founded 1911 in Cleveland. Transformed from auto parts maker to electrical infrastructure leader through strategic acquisitions. Now positioned at the center of electrification + AI infrastructure.