Company Overview - Eaton Corporation plc is a multinational power management company that provides electrical, hydraulic, and mechanical power solutions for various industrial and commercial applications [2] - The company focuses on smart power management, helping customers utilize power more efficiently and sustainably [3] Financial Performance - Eaton reported impressive Q1 2025 results, with revenue increasing by 7.3% to $6.38 billion and a 9% organic growth rate, driven by strength in the Electrical and Aerospace segments [4] - Adjusted EPS climbed 13% to a record $2.72, with segment margins reaching 23.9% [4] - The company has elevated its full-year guidance, anticipating 7.5–9.5% organic growth and adjusted EPS of $11.80–12.20 [4] - Over the past twelve months, Eaton generated $25 billion in revenue, with operating profits of $4.8 billion and net income of $3.9 billion [4] Market Expectations - Analysts forecast adjusted earnings of $2.92 per share on revenue of $6.91 billion for the upcoming second-quarter earnings announcement on August 5, 2025 [3] - This forecast indicates a 7% increase in earnings year-over-year and a 9% rise in sales compared to the previous year's figures of $2.73 per share and $6.35 billion in revenue [3] Historical Performance Trends - Historically, Eaton's stock has exceeded performance expectations following earnings releases, rising 58% of the time with a median one-day increase of 3.6% and a maximum observed surge of 8% [3] - Over the past five years, there have been 19 earnings data points collected, with positive one-day returns occurring approximately 58% of the time [6] - The median of the 11 positive returns was 3.6%, while the median of the 8 negative returns was -1.6% [6] Trading Strategies - Event-driven traders can leverage historical patterns for competitive advantage, whether by positioning before earnings or reacting to movements post-release [5] - A strategy involving the correlation between short-term and medium-term returns following earnings can be effective, particularly if the 1D and 5D returns show strong correlation [7]

Core Viewpoint - Eaton Corporation (ETN) is anticipated to show improvements in both revenue and earnings for Q2 2025, with a prior earnings surprise of 0.74% in Q1 [1]. Group 1: Q2 Earnings Expectations - The Zacks Consensus Estimate for ETN's revenues is $6.93 billion, reflecting a 9.09% increase year-over-year [2]. - The consensus estimate for earnings per share (EPS) is $2.92, indicating a 6.96% increase from the previous year [2]. Group 2: Factors Driving Q2 Performance - Ongoing investments in research and development are enhancing product quality and fostering new solutions, which is expected to drive earnings growth with organic revenue growth projected at 6-8% [3]. - Growth is being fueled by electrification, global megatrends, energy transition, and reindustrialization, impacting approximately 75% of Eaton's end markets [4]. - Increased demand from power-intensive AI data centers is creating new opportunities that support earnings [4]. - A broad product portfolio is leading to strong order wins and a growing backlog, which provides a reliable future revenue pipeline [5]. - Share repurchases funded by free cash flow are likely to positively influence Q2 earnings [6]. Group 3: Earnings Prediction Model - The Zacks model indicates a strong likelihood of an earnings beat for Eaton, supported by a positive Earnings ESP of +0.33% and a Zacks Rank of 3 [7].

Eaton currently has an average brokerage recommendation (ABR) of 1.70, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 23 brokerage firms. An ABR of 1.70 approximates between Strong Buy and Buy. Of the 23 recommendations that derive the current ABR, 14 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 60.9% and 8.7% of all recommendations. Brokerage Recommendation Trends for ETN The recommendations of ...

Core Insights - Analysts forecast Eaton (ETN) to report quarterly earnings of $2.92 per share, reflecting a year-over-year increase of 7% and revenues of $6.93 billion, which is a 9.1% increase compared to the previous year [1] Earnings Estimates - The consensus EPS estimate has remained unchanged over the past 30 days, indicating that analysts have not revised their projections during this period [2] - Revisions to earnings projections are crucial for predicting investor behavior and are strongly linked to short-term stock price performance [3] Key Metrics Forecast - Estimated 'Net Sales- eMobility' is projected at $191.13 million, showing a year-over-year change of +1.1% [5] - 'Net Sales- Aerospace' is expected to reach $1.03 billion, indicating a +7.9% change from the prior year [5] - 'Net Sales- Vehicle' is forecasted at $674.75 million, reflecting a -6.7% change from the previous year [5] - 'Net Sales- Electrical Global' is anticipated to be $1.70 billion, with a +5.9% year-over-year change [6] - 'Net Sales- Electrical Americas' is projected to reach $3.31 billion, indicating a +15.2% change [6] Segment Operating Profit Estimates - 'Segment operating profit (loss)- Aerospace' is expected to be $239.31 million, up from $206.00 million in the same quarter last year [6] - 'Segment operating profit (loss)- Vehicle' is forecasted at $108.81 million, down from $130.00 million in the same quarter last year [7] - 'Segment operating profit (loss)- Electrical Global' is projected to be $327.71 million, compared to $305.00 million in the same quarter last year [7] - 'Segment operating profit (loss)- Electrical Americas' is expected to reach $975.36 million, up from $859.00 million in the previous year [8] Stock Performance - Over the past month, Eaton shares have returned +8.9%, outperforming the Zacks S&P 500 composite's +2.7% change [8] - Currently, ETN holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [8]

Investors interested in Manufacturing - Electronics stocks are likely familiar with Vestas Wind Systems AS (VWDRY) and Eaton (ETN) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look. Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estima ...

Group 1 - The analysis reviews the top 10 of 16 taxable closed-end funds (CEFs) offered by Eaton Vance, indicating a positive experience for investors [1] - The author expresses a desire to expand ownership in these funds, suggesting confidence in their performance [1] - David A. Johnson, the founder of Endurance Capital Management, has over 30 years of investment experience and holds multiple advanced degrees in finance and business [1] Group 2 - The article does not provide specific financial metrics or performance data related to the funds discussed [2][3]

Core Viewpoint - Eaton (ETN) has shown strong stock performance recently, with a +10.6% return over the past month, outperforming the S&P 500 composite's +4.6% and the Zacks Manufacturing - Electronics industry's +12% [1] Earnings Estimate Revisions - The consensus earnings estimate for Eaton is $2.92 per share for the current quarter, reflecting a year-over-year increase of +7% [4] - For the current fiscal year, the consensus earnings estimate is $12.02, indicating a change of +11.3% from the previous year [4] - The next fiscal year's consensus earnings estimate is $13.62, showing a +13.3% change from the prior year [5] - The Zacks Rank for Eaton is 3 (Hold), influenced by recent changes in earnings estimates and other related factors [6] Projected Revenue Growth - The consensus sales estimate for the current quarter is $6.93 billion, representing a year-over-year change of +9.1% [10] - For the current fiscal year, the sales estimate is $27.37 billion, indicating a +10% change, while the next fiscal year's estimate is $29.57 billion, reflecting an +8% change [10] Last Reported Results and Surprise History - Eaton reported revenues of $6.38 billion in the last quarter, a year-over-year increase of +7.3%, with an EPS of $2.72 compared to $2.4 a year ago [11] - The company exceeded consensus revenue estimates once in the last four quarters and beat consensus EPS estimates in all four quarters [12] Valuation - Eaton has a Zacks Value Style Score of D, indicating it is trading at a premium compared to its peers [16]

Core Viewpoint - Morgan Stanley's strategy team highlights 15 stocks with short-term catalytic potential, indicating that S&P 500 index earnings growth in Q2 may exceed expectations [1] Earnings Expectations - The market anticipates a 5% year-over-year increase in S&P 500 Q2 earnings per share and over 4% revenue growth, but actual growth may be stronger [1] - The seven major tech companies are expected to see a 14% increase in net profit, while the remaining 493 constituents may experience a 3% decline [1] - Despite analysts lowering earnings expectations from April to May, the earnings revision has rebounded from -25% to approximately 1%, suggesting Q2 earnings will likely exceed expectations, aligning with the historical average of 4%-5% [1] Recommended Stocks - **argenx SE (ARGX.US)**: undervalued R&D pipeline, target price $700 [2] - **Atlassian (TEAM.US)**: continuous revenue growth potential over 20% and expected margin expansion, target price $320 [3] - **Chewy (CHWY.US)**: benefits from marketing and product optimization, expected revenue to maintain or exceed Q1 levels, target price $50 [4] - **CVS Health (CVS.US)**: advantages from competitor store closures and growth in pharmacy benefit management, target price $80 [4] - **DraftKings (DKNG.US)**: potential earnings inflection point in Q2, with actual licensing rates offsetting tax and regulatory pressures, target price $52 [4] - **Eaton Corporation (ETN.US)**: benefits from improved profit margins in U.S. electrical business, target price $375 [5] - **Eli Lilly (LLY.US)**: core products Mounjaro and Zepbound expected to contribute $8.2 billion in revenue, exceeding expectations may lead to 2025 guidance upgrades, target price $1,135 [5] - **F5 (FFIV.US)**: positive outlook due to demand growth in cloud and load balancing products, target price $305 [6] - **NVIDIA (NVDA.US)**: strong end-user demand and accelerated shipments of rack-level products supporting supply-side growth, target price $170 [7] - **Omada Health (OMDA.US)**: operational leverage through technology empowerment and multi-disease sales, target price $25 [8] - **Southwest Airlines (LUV.US)**: potential stock rebound if internal guidance is met and baggage fee impacts are confirmed as limited, target price $38 [9] - **Valley National Bank (VLY.US)**: expected net interest income growth of 3% quarter-over-quarter, target price $11 [10] - **Western Digital (WDC.US)**: undervalued gross margin expansion prospects, target price $85 [11] Cautious Outlook - **National Storage Affiliates Trust (NSA.US)**: cautious due to expected funds from operations (FFO) per share being below market and company guidance, target price $30 [12] - **Teradyne (TER.US)**: revenue and earnings per share forecasts for FY2026 are 7% and 14% below Wall Street expectations, target price $74 [13] Summary - Overall, Morgan Stanley's recommendations combine company fundamentals, industry trends, and market sentiment, providing diversified options for investors [14]

Core Insights - Eaton has significantly outperformed the S&P 500, delivering total returns of 57.8% since the last article [1] Investment Strategy - A well-diversified portfolio should be constructed with a core foundation of a high-quality low-cost S&P 500 fund [1] - For those who can tolerate short-term risks, an overweight position in the technology sector is recommended, as it is believed to be in the early stages of a long-term secular bull market [1] - Large oil and gas companies that provide strong dividend income and growth are suggested for dividend income [1] - A top-down capital allocation approach is recommended, tailored to individual investor situations, including factors like age, retirement status, risk tolerance, income, net worth, and goals [1]

Company Performance - Eaton's stock closed at $373.66, reflecting a -1.31% change from the previous day's closing price, underperforming the S&P 500 which gained 0.14% [1] - Over the past month, Eaton's stock has increased by 14.31%, outperforming the Industrial Products sector's gain of 7.52% and the S&P 500's gain of 5.35% [1] Upcoming Earnings - Eaton's earnings report is anticipated on August 5, 2025, with expected earnings of $2.92 per share, indicating a year-over-year growth of 6.96% [2] - The consensus estimate for revenue is $6.93 billion, representing a 9.09% increase compared to the same quarter last year [2] Fiscal Year Estimates - For the entire fiscal year, the Zacks Consensus Estimates predict earnings of $12.01 per share and revenue of $27.36 billion, reflecting changes of +11.2% and +9.98% respectively from the previous year [3] - Recent modifications to analyst estimates for Eaton suggest positive sentiment regarding the company's business and profitability [3] Stock Performance and Valuation - The Zacks Rank system indicates that estimate alterations are linked to stock price performance, with Eaton currently holding a Zacks Rank of 3 (Hold) [4][5] - Eaton's Forward P/E ratio is 31.52, which is higher than the industry average of 24.02, suggesting that Eaton is trading at a premium [6] - The PEG ratio for Eaton is 2.86, compared to the industry average PEG ratio of 1.98, indicating a higher valuation relative to expected earnings growth [6] Industry Context - The Manufacturing - Electronics industry, part of the Industrial Products sector, has a Zacks Industry Rank of 45, placing it in the top 19% of over 250 industries [7] - Strong individual industry groups, as measured by the Zacks Industry Rank, tend to outperform weaker groups by a factor of 2 to 1 [7]