In the latest trading session, Eaton (ETN) closed at $315.82, marking a -4.28% move from the previous day. The stock trailed the S&P 500, which registered a daily loss of 1.16%. On the other hand, the Dow registered a loss of 0.47%, and the technology-centric Nasdaq decreased by 1.81%.
Heading into today, shares of the power management company had lost 2.47% over the past month, lagging the Industrial Products sector’s gain of 3.36% and the S&P 500’s gain of 1.03%.
The investment community will be paying close attention to the earnings performance of Eaton in its upcoming release. The company’s upcoming EPS is projected at $3.35, signifying a 18.37% increase compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.13 billion, up 14.31% from the year-ago period.
For the full year, the Zacks Consensus Estimates are projecting earnings of $12.09 per share and revenue of $27.54 billion, which would represent changes of +11.94% and +10.7%, respectively, from the prior year.
Investors should also pay attention to any latest changes in analyst estimates for Eaton. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we’ve formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there’s been a 0.03% rise in the Zacks Consensus EPS estimate. Right now, Eaton possesses a Zacks Rank of #3 (Hold).
Looking at valuation, Eaton is presently trading at a Forward P/E ratio of 27.29. This expresses a premium compared to the average Forward P/E of 25.37 of its industry.
Also, we should mention that ETN has a PEG ratio of 2.39. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. The Manufacturing – Electronics industry had an average PEG ratio of 2.03 as trading concluded yesterday.
The Manufacturing – Electronics industry is part of the Industrial Products sector. With its current Zacks Industry Rank of 54, this industry ranks in the top 22% of all industries, numbering over 250.