Eaton (ETN) Laps the Stock Market: Here's Why

In the latest trading session, Eaton (ETN) closed at $361.04, marking a +1.59% move from the previous day. This move outpaced the S&P 500's daily gain of 1.01%. Elsewhere, the Dow gained 0.83%, while the tech-heavy Nasdaq added 1.22%.

Shares of the power management company witnessed a loss of 8.7% over the previous month, beating the performance of the Industrial Products sector with its loss of 10.02%, and underperforming the S&P 500's loss of 2.86%.

Analysts and investors alike will be keeping a close eye on the performance of Eaton in its upcoming earnings disclosure. In that report, analysts expect Eaton to post earnings of $2.77 per share. This would mark year-over-year growth of 1.84%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.07 billion, up 10.91% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $13.36 per share and a revenue of $30.16 billion, representing changes of +10.69% and +9.9%, respectively, from the prior year.

Investors should also pay attention to any latest changes in analyst estimates for Eaton. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, there's been a 0.01% rise in the Zacks Consensus EPS estimate. Eaton is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, Eaton is holding a Forward P/E ratio of 26.61. This denotes a premium relative to the industry average Forward P/E of 24.25.

Meanwhile, ETN's PEG ratio is currently 2.44. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Manufacturing - Electronics industry held an average PEG ratio of 1.83.

The Manufacturing - Electronics industry is part of the Industrial Products sector. With its current Zacks Industry Rank of 74, this industry ranks in the top 31% 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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Eaton Corporation, PLC (ETN): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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