Fact based stock research
Eaton (NYSE:ETN)

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Eaton stock research in summary

eaton.com

ANALYSIS: With an Obermatt Combined Rank of 24 (worse than 76% compared with investment alternatives), Eaton (Electr. Components & Equipment, Ireland) shares have lower financial characteristics compared with similar stocks. Shares of Eaton are low in value (priced high) with a consolidated Value Rank of 1 (worse than 99% of alternatives), and are riskily financed (Safety Rank of 32, which means above-average debt burdens) but show above-average growth (Growth Rank of 98). ...read more

RECOMMENDATION: A Combined Rank of 24, is a sell recommendation based on Eaton's financial characteristics. As the company Eaton shows low value with an Obermatt Value Rank of 1 (99% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 98% of comparable companies (Obermatt Growth Rank is 98). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 32 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Eaton, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	1
Growth Rank	98
Safety Rank	32
Combined Rank	24

Country	Ireland
Industry	Electr. Components & Equipment
Index	Human Rights, Water Tech, S&P 500
Size class	XX-Large

This stock has achievements: Top 10 Stock.

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Eaton

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	64	18	9	1
GROWTH
GROWTH	51	59	99	98
SAFETY
SAFETY	10	9	16	32
SENTIMENT
SENTIMENT	n/a	18	49	^new
360° VIEW
360° VIEW	n/a	1	22	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Eaton is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	64	18	9	1
GROWTH
GROWTH	51	59	99	98
SAFETY
SAFETY	10	9	16	32
COMBINED
COMBINED	24	4	18	24

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Eaton the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 1 (worse than 99% compared with alternatives), Eaton shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Eaton. Price-to-Sales is 3 which means that the stock price compared with what market professionals expect for future profits is higher than 97% of comparable companies, indicating a low value concerning Eaton's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 1, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Eaton. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 9 and Dividend Yield, which is lower than 56% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 1, is a sell recommendation based on Eaton's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Eaton? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Eaton? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Eaton may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	48	25	11	3
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	53	13	5	9
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	33	21	5	1
DIVIDEND YIELD
DIVIDEND YIELD	86	62	50	44
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	64	18	9	1

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Eaton; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 98 (better than 98% compared with alternatives) for 2024, Eaton shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Eaton. Sales Growth has a value of 62, which means that, currently, professionals expect the company to grow more than 62% of its competitors. The same is valid for Profit Growth with a value of 76 and for Capital Growth with 92. In addition, Stock Returns had an above-average rank value of 90, which means they have been higher than 90% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 98, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Eaton exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	34	6	58	62
PROFIT GROWTH
PROFIT GROWTH	2	59	71	76
CAPITAL GROWTH
CAPITAL GROWTH	n/a	78	90	92
STOCK RETURNS
STOCK RETURNS	69	83	87	90
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	51	59	99	98

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Eaton.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 32 (better than 32% compared with alternatives), the company Eaton has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Eaton is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Eaton. Liquidity is at 64, meaning the company generates more profit to service its debt than 64% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 10, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 90% of its competitors. Leverage is also high at a rank of 47, which means that the company has an above-average debt-to-equity ratio. It has more debt than 53% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 32 (worse than 68% compared with alternatives), Eaton has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	24	46	48	47
REFINANCING
REFINANCING	18	15	17	10
LIQUIDITY
LIQUIDITY	38	16	43	64
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	10	9	16	32

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Eaton and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	46	48	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	32	86	^new
MARKET PULSE
MARKET PULSE	n/a	36	31	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	18	49	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Eaton.
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