Eaton Corporation plc
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Eaton's electrification supercycle is intact — Q2 2026 revenue of $8.53B grew 21.4% YoY, well above FY2025's 10.3% pace, with the electrical global backlog up 103% YoY signaling durable multi-year demand.
However, Q2 2026 net income of $821M fell below Q2 2025's $982M despite the revenue surge, and at 43.6x trailing PE — a 19.2% premium to the peer median of 36.6x — the stock prices in near-flawless execution. Net insider selling of $77.4M over 24 months and a softening smart-money score of 0.121 as of Q2 2026 temper conviction. Hold pending evidence that margins re-expand alongside top-line growth.
What could go wrong
- Margin compression amid growth. Q2 2026 net income of $821M declined from Q2 2025's $982M despite 21.4% revenue growth, suggesting acquisition costs or mix pressure are eroding profitability even as the top line accelerates.
- Premium valuation. At 43.6x trailing PE — a 19.2% premium to the peer median of 36.6x — and 29.1x EV/EBITDA versus a peer median of 25.5x, any disappointment in backlog conversion or margin recovery could trigger a sharp de-rating.
- Persistent insider selling. Net insider dispositions of $77.4M over 24 months with only 7 acquisitions against 20 dispositions signal that management is not aggressively accumulating at current levels.
- Smart-money softening. The smart-money score declined to 0.121 as of Q2 2026 from 0.163 in Q1 2026, and fund count has been flat at 64, suggesting institutional enthusiasm may be plateauing near these valuations.
What would change my mind
Where this comes from: Q2 2026 results · FY25 fundamentals · news, 8 Oct · Q2 2026 and Q2 2025 results. Orin's read on ETN; not advice.
How has the share price moved?
Up 1.2% over twelve months, from $379.74 on 27 Oct 2025 to $384.20 at the Tue 27 Oct 2026 close. Its highest close in that time was $459.96 on 12 Aug 2026; the last close is 16.5% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 7.7M, on 17 Dec 2025).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All ETN filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $13.1B | 0.2% |
| Vanguard Capital Management | $10.8B | 0.2% |
| State Street | $7.4B | 0.2% |
| JPMorgan Chase | $6.9B | 0.4% |
| Morgan Stanley | $5.6B | 0.3% |
| Bank of America | $4.7B | 0.3% |
| Vanguard Portfolio Management | $4.0B | 0.2% |
| Geode Capital Management | $3.8B | 0.2% |
| FMR | $3.6B | 0.2% |
| Wellington Management Group | $2.9B | 0.5% |
136 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 208 Form 4 filings; open-market trades net −$77.4M. Of the 50 on hand, 4 were open-market purchases and 5 sales — the rest are grants, option exercises and tax withholding.
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Start 3 free days →How is it priced, against its own past and its sector?
Priced at 39.0× its last 12 months of profit (Tue 27 Oct close) — higher than in all 5 of its last 5 fiscal years (middle 30.4×); the typical Industrials company on the NYSE is at 33.7×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 39.0×above usual | 30.4× | 33.7× |
| P/S | 4.97×above usual | 4.14× | — |
| EV/EBITDA | 26.3×above usual | 21.3× | — |
| P/B | 7.4×above usual | 5.0× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $502 (from $480 to $520) — 31% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$502
$480 – $520 · +31% against the last close
- 14 buy or overweight
- 2 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 39.0× its last 12 months of profit; the middle P/E of the 3 companies it is compared to that made a profit is 30.7×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| ETNEaton Corporation plc | $149B | 39.0× | 26.3× | 35.9% | 12.8% | 20% |
| HUBBHubbell Incorporated | $23B | 25.4× | 17.4× | 35.4% | 13.8% | 23% |
| POWLPowell Industries, Inc. | $6B | 30.7× | 21.1× | 30.1% | 16.5% | 28% |
| VRTVertiv Holdings Co | $80B | 46.1× | 31.7× | 38.0% | 15.1% | 42% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 39.0× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now39.0×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Industrials companies on the NYSE were priced at a typical 33.7× their yearly profit (Tue 27 Oct close).
- Now33.7×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $182 a share — 53% below the $383.53 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $182 | 53% below $383.53 |
| Levered | $151 | 61% below $383.53 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.