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Eaton (ETN) Moves 3.2% Higher: Will This Strength Last?

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Eaton (ETN - Free Report) shares rallied 3.2% in the last trading session to close at $164.38. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 8.3% loss over the past four weeks.

Eaton’s fourth-quarter earnings and revenues were better than expected. Eaton operates in several markets across the globe and its strategic acquisitions allow it to foray into new markets and enhance its revenue stream. Eaton’s strategy to manufacture in the zone of sale has helped it to offset the impact of tariffs on material prices.

Eaton has completed more than $8 billion transformative portfolio management and will be able to focus on the remaining businesses that will allow it to further improve earnings in the long run. Eaton intends to invest $630 million in 2023 to further strengthen its operation.

This power management company is expected to post quarterly earnings of $1.77 per share in its upcoming report, which represents a year-over-year change of +9.3%. Revenues are expected to be $5.23 billion, up 7.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Eaton, the consensus EPS estimate for the quarter has been revised marginally higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on ETN going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Eaton belongs to the Zacks Manufacturing - Electronics industry. Another stock from the same industry, Murata Manufacturing Inc. (MRAAY - Free Report) , closed the last trading session 3.3% higher at $14.25. Over the past month, MRAAY has returned -1.1%.

Murata Manufacturing Inc.'s consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.18. Compared to the company's year-ago EPS, this represents a change of -14.3%. Murata Manufacturing Inc. currently boasts a Zacks Rank of #3 (Hold).


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