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Eaton Corporation plc (ETN) is a global leader in power management and boasts a market cap of $122.7 billion. The Dublin, Ireland-based company excels in electrical components, aerospace systems, vehicle parts, and eMobility technologies.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Eaton fits this criterion perfectly. Eaton stands out for its advanced and diverse solutions that drive efficiency and sustainability across multiple industries worldwide
However, the power management company pulled back 11.1% from its 52-week high of $345.19, achieved in May. Over the past three months, shares of Eaton have seen a decline of 5.8%, lagging behind The Industrial Select Sector SPDR Fund’s (XLI) gain of 7.8% during the same timeframe.
Nevertheless, over the longer term, ETN stock is up 26.9% on a YTD basis, overshadowing XLI’s 15.3% gains. Moreover, shares of United Rentals have gained 30.8% over the past 52 weeks, compared to XLI’s 20.8% gains over the same time frame.
Since last year, ETN has maintained a position consistently above its 200-day moving average. But, the stock has been trading below its 50-day moving average since June.
Eaton’s outperformance over the past year is driven by a strong backlog, increased demand in key markets like data centers and aerospace, and successful execution of innovative offerings such as the Brightlayer software platform.
However, despite beating Q2 adjusted EPS of $2.73 per share expectations and meeting revenue forecasts at $6.4 billion, the stock fell 2.3% on Aug. 1. The drop was likely due to cautious investor reactions to the company’s slightly conservative Q3 2024 guidance and a deceleration in growth within its Vehicle segment.
To emphasize the stock’s outperformance, ETN surged ahead of its rival Emerson Electric Co. (EMR), which has gained 6.5% over the past 52 weeks and an 8.3% rise on a YTD basis.
Despite the stock’s impressive price action over the past year, analysts are cautiously optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 16 analysts covering the stock, and the mean price target of $342.07 suggests a premium of 11.4% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
