In the latest close session, Eaton (ETN) was up +1.23% at $324.51. The stock exceeded the S&P 500, which registered a gain of 0.65% for the day. Meanwhile, the Dow experienced a rise of 0.48%, and the technology-dominated Nasdaq saw an increase of 0.82%.
The power management company’s stock has dropped by 8.5% in the past month, falling short of the Industrial Products sector’s gain of 3.45% and the S&P 500’s gain of 1.15%.
The investment community will be paying close attention to the earnings performance of Eaton in its upcoming release. The company’s earnings per share (EPS) are projected to be $3.34, reflecting a 18.02% increase from the same quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $7.13 billion, reflecting a 14.19% rise from the equivalent quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $12.08 per share and revenue of $27.52 billion, indicating changes of +11.85% and 0%, respectively, compared to the previous year.
Investors might also notice recent changes to analyst estimates for Eaton. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we’ve crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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. Within the past 30 days, our consensus EPS projection has moved 0.39% lower. As of now, Eaton holds a Zacks Rank of #3 (Hold).
Looking at valuation, Eaton is presently trading at a Forward P/E ratio of 23.45. This expresses a premium compared to the average Forward P/E of 23.17 of its industry.
We can additionally observe that ETN currently boasts a PEG ratio of 2.05. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. As of the close of trade yesterday, the Manufacturing – Electronics industry held an average PEG ratio of 1.79.
The Manufacturing – Electronics industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 39, putting it in the top 16% of all 250+ industries.