2024-03-06 15:42:11 ET
Summary
- Eaton Corp's shares have rallied nearly 65% in the past year, benefiting from its strong position in US electrification and data centers.
- The company reported solid Q4 earnings, beating expectations, with impressive margin performance and better-than-expected sales, margins, and cash flow.
- Eaton expects continued growth in 2024, with 11% EPS growth and 7.5% revenue growth, driven by mega projects and growth in data centers.
- While its growth trajectory is solid, at 28x earnings, strong growth is priced in and market-like returns are likely.
Shares of Eaton Corp ( ETN ) have been an extraordinary performer over the past year, rallying nearly 65%, as the industrial company benefits from its excellent positioning in US electrification and data centers. Since recommending shares in October as a buy, Eaton has returned about 40%, doubling the S&P 500’s return. Frankly, at $291, shares have moved more dramatically and more quickly than I expected. Eaton is a well-run company that is well-positioned; however, with shares having rallied so much, valuation has become full....
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Eaton's Growth Is Reflected In Its High Valuation (Rating Downgrade)