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Why Eaton (ETN) Outpaced the Stock Market Today

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In the latest close session, Eaton (ETN - Free Report) was up +1.55% at $376.70. This change outpaced the S&P 500's 0.58% gain on the day.

Prior to today's trading, shares of the power management company had gained 6.52% outpaced the Industrial Products sector's gain of 0.74% and the S&P 500's gain of 3.68%.

The upcoming earnings release of Eaton will be of great interest to investors. It is anticipated that the company will report an EPS of $3.06, marking a 7.75% rise compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $7.06 billion, indicating a 11.34% upward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $12.08 per share and revenue of $27.57 billion, which would represent changes of +11.85% and +10.8%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Eaton. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.03% higher. Eaton is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Eaton is holding a Forward P/E ratio of 30.7. This expresses a premium compared to the average Forward P/E of 23.03 of its industry.

We can also see that ETN currently has a PEG ratio of 2.65. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. ETN's industry had an average PEG ratio of 1.92 as of yesterday's close.

The Manufacturing - Electronics industry is part of the Industrial Products sector. With its current Zacks Industry Rank of 151, this industry ranks in the bottom 39% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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