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Eaton (ETN) Surpasses Market Returns: Some Facts Worth Knowing

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In the latest trading session, Eaton (ETN - Free Report) closed at $327.31, marking a +2.76% move from the previous day. This move outpaced the S&P 500's daily gain of 0.19%. Elsewhere, the Dow saw an upswing of 0.66%, while the tech-heavy Nasdaq depreciated by 0.03%.

The stock of power management company has fallen by 6.02% in the past month, lagging the Industrial Products sector's gain of 0.2% and the S&P 500's gain of 0.54%.

Investors will be eagerly watching for the performance of Eaton in its upcoming earnings disclosure. The company is predicted to post an EPS of $3.34, indicating a 18.02% growth compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $7.12 billion, indicating a 14.17% upward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $12.08 per share and a revenue of $27.53 billion, demonstrating changes of +11.85% and 0%, respectively, from the preceding year.

Any recent changes to analyst estimates for Eaton should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.4% lower. At present, Eaton boasts a Zacks Rank of #3 (Hold).

From a valuation perspective, Eaton is currently exchanging hands at a Forward P/E ratio of 23.3. This signifies a premium in comparison to the average Forward P/E of 21.38 for its industry.

Also, we should mention that ETN has a PEG ratio of 2.04. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. ETN's industry had an average PEG ratio of 1.72 as of yesterday's close.

The Manufacturing - Electronics industry is part of the Industrial Products sector. With its current Zacks Industry Rank of 34, this industry ranks in the top 14% of all industries, numbering over 250.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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