We came across a bullish thesis on Eaton Corporation plc on Uncle Stock Notes’s Substack. In this article, we will summarize the bulls’ thesis on ETN. Eaton Corporation plc’s share was trading at $333.11 as of December 2nd. ETN’s trailing and forward P/E were 34.01 and 25.06 respectively according to Yahoo Finance.
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Eaton Corporation plc operates as a power management company in the United States, Canada, Latin America, Europe, and the Asia Pacific. ETN delivered a third-quarter 2025 report that underscores the success of its ongoing transformation. While total revenue of $6.99 billion was slightly below expectations, adjusted EPS of $3.07 and record-breaking segment margins highlight the company’s operational strength. Electrical Americas, Eaton’s core segment, achieved $3.41 billion in revenue, up 15% year-over-year, with an unprecedented 30.3% operating margin, reflecting near-software-level profitability driven by strong demand for power distribution in data centers, AI infrastructure, and electrification projects.
Orders remain robust, with a 12-month rollover growth of 7% and a backlog up 20%, indicating strong visibility for the next year. Aerospace also delivered impressive results, with 14% revenue growth, a 25.9% margin, and backlogs rising 15%, supported by commercial aviation recovery, aftermarket maintenance, and defense spending.
Strategic acquisitions further strengthen Eaton’s positioning. The $9.5 billion acquisition of Boyd Thermal enables the company to offer end-to-end AI power and liquid cooling solutions, creating a unique integrated proposition for hyperscale data centers. Free cash flow reached a record $1.2 billion, supporting both growth initiatives and shareholder returns. While automotive and eMobility segments continue to lag, management has decisively redirected focus toward higher-margin, high-growth areas. Guidance for full year adjusted EPS has been revised upward to $12.07, with organic growth and segment margins exceeding prior forecasts, signaling robust underlying performance.
Eaton’s valuation remains attractive, with forward P/E and DCF models implying fair value in the $335–$402 range, close to its current price of $367.91. The combination of record margins, high-growth backlogs, strategic M&A, and resilient aerospace cash flows positions Eaton as a unique industrial leader capturing the AI electrification and infrastructure wave, while retaining a stable foundation in traditional operations.
Previously we covered a bullish thesis on Hubbell Incorporated (HUBB) by Stock Analysis Compilation in December 2024, which highlighted its position in electrical products and growth from U.S. grid modernization. The company’s stock price has depreciated approximately by 8.48% since our coverage. The thesis still stands as Hubbell benefits from infrastructure upgrades. Uncle Stock Notes shares a similar perspective but emphasizes Eaton’s record margins and AI data center expansion.
Eaton Corporation plc is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 74 hedge fund portfolios held ETN at the end of the second quarter which was 85 in the previous quarter. While we acknowledge the risk and potential of ETN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ETN and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.