/Eaton%20Corporation%20plc%20logo%20on%20building-by%20JHVEPhoto%20via%20Shutterstock.jpg)
Dublin, Ireland-based Eaton Corporation plc (ETN) manufactures engineered products for the industrial, vehicle, construction, commercial, and aerospace markets. Valued at $119.78 billion by market cap, the company offers hydraulic products, fluid connectors, electrical power distribution, control equipment, truck drivetrain systems, engine components, and various controls. The global leader in power management solutions is expected to announce its fiscal second-quarter earnings for 2024 before the market opens on Thursday, Aug. 1.
Ahead of the event, analysts expect ETN to report a profit of $2.61 per share on a diluted basis, up 18.1% from $2.21 per share in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimates in its last four quarterly reports. The improvement was driven by increased project activity tied to megatrends, reindustrialization, and infrastructure spending.
For the full year, analysts expect ETN to report EPS of $10.56, up 15.8% from $9.12 in fiscal 2023.
ETN stock has significantly outperformed the S&P 500’s ($SPX) 19.2% gains over the past 52 weeks, with shares up 44.5% during this period. Similarly, it outshined the S&P 500 Industrial Sector SPDR’s (XLI) 12.2% gains over the same time frame.
ETN’s overall performance can be attributed to the growing demand for power management components for use in data centers, aircraft, cars, trucks, and machines. As a major supplier of equipment for electric vehicle charging and the aerospace industry, investors believe that the company will be a crucial beneficiary of the growing investments in improving energy consumption.
Recently, its acquisition of Exertherm marked its expansion into continuous thermal monitoring, improving the safety and reliability of critical electrical equipment in key markets like data centers, highlighting the strong demand for power management solutions.
On Jun. 6, ETN shares closed down more than 4% due to speculations that the increase in power demand driven by AI and data centers may be too optimistic.
On Apr. 30, ETN reported its Q1 results. Its adjusted EPS increased 27.7% year over year to $2.40. The company’s revenue stood at $5.94 billion, up 8.4% year over year. For Q2, the company anticipates its adjusted EPS to be between $2.52 and $2.62. ETN raised its full-year guidance and expects its adjusted EPS to be between $10.20 and $10.60, up 14% at the midpoint from the prior year, and raised its organic growth guidance from between 6.5% and 8.5% to 7% to 9%.
Meanwhile, the company estimates its fiscal 2024 operating cash flow to be between $4 billion and $4.40 billion and free cash flow to be between $3.20 billion and $3.60 billion. ETN shares closed down more than 2% on the day the results were released and have been on a downtrend since then.
Analysts’ consensus opinion on ETN stock is bullish, with a “Moderate Buy” rating overall. Out of 17 analysts covering the stock, 10 advise a “Strong Buy” rating, two suggest a “Moderate Buy” rating, four give a “Hold” rating, and one recommends a “Strong Sell.” The average analyst price target for ETN is $339.20, indicating a potential upside of 13.2% from the current levels.
On the date of publication, Dipanjan Banchur 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.
