# Eaton (ETN.US)

Canonical: https://gigainvestors.com/s/ETN

Analysis as of: 2026-10-16T07:28:22.349Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $402.48 per share; close as of 2026-10-15.

Estimated value: low $114.98 per share, central $130.80 per share, high $151.86 per share. Buy at or below the central value $130.80 per share. Valuation as of 2026-10-16T07:28:22.349Z; scenarios are not confidence intervals.

Expected annual return: 5.2% at the stated quote. About 5.2% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 2 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 0

- Operating margin variation: 0.14×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.13×

- FY2018: 0.14×

- FY2019: 0.14×

- FY2020: 0.13×

- FY2021: 0.15×

- FY2022: 0.16×

- FY2023: 0.16×

- FY2024: 0.20×

- FY2025: 0.19×

- LTM to Jun 2026: 0.18×

### moat: pass

- ROIC, median of available years: 24.9%

- ROIC, second-lowest year: 20.4%

- Typical minus recent gross margin: -2.8 pp

- Typical gross margin (annual median): 33.1%

- Recent gross margin (lower of latest and 3-year median): 35.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.9%

- ROIC including acquisitions, ten-year median: 10.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 22.9%

- FY2018: 26.8%

- FY2019: 24.5%

- FY2020: 20.2%

- FY2021: 21.2%

- FY2022: 25.4%

- FY2023: 28.6%

- FY2024: 35.1%

- FY2025: 30.9%

- LTM to Jun 2026: 20.4%

### economics: pass

- Owner earnings / net income, 5-yr: 1.03×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $16B

- Net income, five-year total: $16B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 0.1 pp

- Working capital / revenue, change between three-year averages: 0.0 pp

- Working capital / revenue, final three-year average: 21.1%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.16×

- FY2022: 1.14×

- FY2023: 0.88×

- FY2024: 1.03×

- FY2025: 1.02×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 24.0% vs 30.9%

- Per-share earnings: 4.24 to 9.50 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.8%

- Ordinary dilution, 5-year annual growth: -0.6%

- Market cap gain: $93B

- Cumulative retained earnings: $3.2B

- Diluted shares, 10-year annual growth: -1.8%

- Diluted shares, 5-year annual growth: -0.6%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 10.6%

- Per-share value change: $5.26

- Per-share value, starting three-year median: $4.24

- Per-share value, ending three-year median: $9.50

- Buybacks concentrated in cheaper years (correlation): 0.36

- Average buyback yield: 1.9%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $5.1B

- Cumulative net income, 10 years: $26B

- ROIC, first three-year median: 24.0%

- ROIC, last three-year median: 30.9%

Chart: Earnings per share; fiscal year observations.

- FY2016: $4.21

- FY2017: $6.68

- FY2018: $4.91

- FY2019: $5.25

- FY2020: $3.49

- FY2021: $5.34

- FY2022: $6.14

- FY2023: $8.02

- FY2024: $9.50

- FY2025: $10.45

### accounting: pass

- Sloan accruals: -0.9%

- Receivables to sales index (DSRI): 1.06×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: -1.1%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.09×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 1.07×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -2.1%

- FY2017: 1.0%

- FY2018: -1.6%

- FY2019: -3.8%

- FY2020: -4.8%

- FY2021: -0.1%

- FY2022: -0.2%

- FY2023: -1.1%

- FY2024: -1.4%

- FY2025: -0.9%

## Holders

- [David Katz](https://gigainvestors.com/MAVFX): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 15.1% a year for ten years · sales +9.4%

Story as of 2026-10-16T09:58:43.034Z; price observation 2026-10-15.

Price needs cash profits to grow 15.1% a year for ten years

- 2025-05-13: Eaton (NYSE:ETN) Reports Robust Q1 Earnings with Year-Over-Year Sales Increase ([finance.yahoo.com](https://finance.yahoo.com/news/eaton-nyse-etn-reports-robust-234727092.html))

- 2025-06-18: Eaton Corporation's SWOT analysis: stock surges on data center growth, valuation concerns linger ([investing.com](https://www.investing.com/news/swot-analysis/eaton-corporations-swot-analysis-stock-surges-on-data-center-growth-valuation-concerns-linger-93CH-4101480))

- 2025-07-15: Eaton shares rise on NVIDIA partnership to power HVDC AI data centers ([finance.yahoo.com](https://finance.yahoo.com/news/eaton-shares-rise-nvidia-partnership-132225683.html))

- 2025-08-05: Eaton shares tumble as Q3 guidance falls short of expectations ([finance.yahoo.com](https://finance.yahoo.com/news/eaton-shares-tumble-q3-guidance-110833835.html))

- 2025-11-04: Eaton shares tumble despite record Q3 earnings, as revenue misses mark ([finance.yahoo.com](https://finance.yahoo.com/news/eaton-shares-tumble-despite-record-120819471.html))

- 2026-04-09: Eaton to build Nebraska switchgear facility as data center demand surges ([seekingalpha.com](https://seekingalpha.com/news/4573824-eaton-to-build-nebraska-switchgear-facility-as-data-center-demand-surges?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

### Sales · FY2025–2026

sales +9.4%; source https://www.sec.gov/Archives/edgar/data/1551182/000155118226000007/etn-20251231.htm; observed 2026-02-26.

- FY2017: $20B 

- FY2018: $22B 

- FY2019: $21B 

- FY2020: $18B 

- FY2021: $20B 

- FY2022: $21B 

- FY2023: $23B 

- FY2024: $25B 

- FY2025: $27B 

- FY2026: $30B 

### Gross margin · FY2026

gross margin 35.9%; source https://www.sec.gov/Archives/edgar/data/1551182/000155118226000007/etn-20251231.htm; observed 2026-02-26.

- FY2017: 32.7% 

- FY2018: 32.9% 

- FY2019: 33.0% 

- FY2020: 30.5% 

- FY2021: 32.2% 

- FY2022: 33.3% 

- FY2024: 38.2% 

- FY2025: 37.6% 

- FY2026: 35.9% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in specialty industrial machinery; annual sales are USD 27.4 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1551182/000155118226000007/etn-20251231.htm (filed 2026-02-26); FY2025: revenue 27448000000; grossProfit 10317000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); ETN.US: Eaton Corporation plc operates as a power management company in the United States, Canada, Latin America, Europe, and the Asia Pacific. It operates through Electrical Americas, Electrical Global, Aerospace, Vehicle, and eMobility segments. The company offers electrical and industrial components, power distribution and assemblies, residential products, single- and three-phase power quality and connectivity products, wiring devices, circuit protection products, utility power distribution products, and power reliability equipment; and hazardous duty electrical equipment, emergency lighting, fire detection, intrinsically safe explosion-proof instrumentation, and structural support systems. It also provides pumps, motors, hydraulic power units, hoses and fittings, and electro-hydraulic pumps; valves, cylinders, electronic controls, electromechanical actuators, sensors, aircraft flap and slat systems, and nose wheel steering systems; hose and thermoplastic tubing products, fittings, adapters, couplings, and sealing and ducting products; air-to-air refueling systems, fuel pumps, fuel inerting products, sensors, and adapters and regulators; oxygen generation systems, payload carriages, and thermal management products; wiring connectors and cables; and hydraulic and bag filters, strainers and cartridges, and golf grips for manufacturers of commercial and military aircraft, related aftermarket customers, and industrial applications. In addition, the company offers transmissions, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, locking and limited slip differentials, transmission controls, and fuel vapor components for the vehicle industry; and voltage inverters, converters, fuses, circuit protection units, vehicle controls, power distribution systems, fuel tank isolation valves, and commercial vehicle hybrid systems. The company was formerly known as Abeiron Limited. The company was founded in 1911 and is based in Dublin, Ireland.

### Why customers stay

Margins ranged from 37.6% to 100% during 2023–25; it earns 24.9% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2023: grossProfit / revenue = 100%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2024: grossProfit / revenue = 38.2%.

- Source: https://www.sec.gov/Archives/edgar/data/1551182/000155118226000007/etn-20251231.htm (filed 2026-02-26); FY2025: grossProfit / revenue = 37.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); 10-year return on capital observations [[2017,0.22933955674446738],[2018,0.26774898078043097],[2019,0.2446137611885453],[2020,0.2020618433650717],[2021,0.2124608816597767],[2022,0.25419437256452104],[2023,0.28606373354663495],[2024,0.3514710037203566],[2025,0.30940066027629154],[2026,0.20402321758918773]]; median 0.24940406687653316. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 1.9 billion of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2016: growth capex 0; upkeep 497000000; owner earnings 2354000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2017: growth capex 0; upkeep 520000000; owner earnings 3379000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2018: growth capex 0; upkeep 565000000; owner earnings 2483000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2019: growth capex 0; upkeep 587000000; owner earnings 2508000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2020: growth capex 0; upkeep 389000000; owner earnings 1832000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2021: growth capex 0; upkeep 575000000; owner earnings 2491000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2022: growth capex 0; upkeep 598000000; owner earnings 2818000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2023: growth capex 445577280.93405336; upkeep 311422719.06594664; owner earnings 2843577280.9340534. Growth capex / owner earnings = 0.156696033521442.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2024: growth capex 0; upkeep 808000000; owner earnings 3907000000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1551182/000155118226000007/etn-20251231.htm (filed 2026-02-26); FY2025: growth capex 0; upkeep 919000000; owner earnings 4176000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); Dividend observations: [[2016,1037000000],[2017,1068000000],[2018,1149000000],[2019,1201000000],[2020,1175000000],[2021,1219000000],[2022,1299000000],[2023,1379000000],[2024,1500000000],[2025,1626000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1551182/000155118226000007/etn-20251231.htm (filed 2026-02-26); FY2025: cash repurchases 1862000000 USD.

### Are managers owners

Insiders own 0.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); ETN.US SharesStats.PercentInsiders = 0.07200000000000001 percentage points; cache date 2026-10-16.

### What could break it

An IRS tax dispute could require additional payments.

- Source: https://www.sec.gov/Archives/edgar/data/1551182/000155118226000007/etn-20251231.htm (filed 2026-02-26);  (i) transfer pricing adjustments for products manufactured in the Company's facilities in Puerto Rico and the Dominican Republic and sold to affiliated companies located in the United States, and (ii) the separate proposed assessment noted below. The proposed assessment in the 2007-10 Notice for transfer pricing adjustments has been resolved in Tax Court. Eaton US set its transfer prices for products sold between these affiliates at the same prices that Eaton US sells such products to third parties as required by two successive Advance Pricing Agreements (APAs) Eaton US entered into with the IRS that governed the 2005-2010 tax years. Eaton US has continued to apply the APA pricing methodology for 2011 through the current reporting period. In 2011, the IRS sent a letter to Eaton stating that it was retrospectively canceling the APAs. The issue in Tax Court involved whether the IRS improperly cancelled the APAs. On July 26, 2017, the Tax Court issued a ruling in which it agreed with Eaton US that the IRS must abide by the terms of the APAs for the tax years 2005-2006. On May 24, 2021, the IRS filed a notice to appeal the Tax Court’s ruling to the United States Sixth Circuit Court of Appeals. In J

the Dominican Republic and sold to affiliated companies located in the United States, and (ii) the separate proposed assessment noted below. The proposed assessment in the 2007-10 Notice for transfer pricing adjustments has been resolved in Tax Court. Eaton US set its transfer prices for products sold between these affiliates at the same prices that Eaton US sells such products to third parties as required by two successive Advance Pricing Agreements (APAs) Eaton US entered into with the IRS that governed the 2005-2010 tax years. Eaton US has continued to apply the APA pricing methodology for 2011 through the current reporting period. In 2011, the IRS sent a letter to Eaton stating that it was retrospectively canceling the APAs. The issue in Tax Court involved whether the IRS improperly cancelled the APAs. On July 26, 2017, the Tax Court issued a ruling in which it agreed with Eaton US that the IRS must abide by the terms of the APAs for the tax years 2005-2006. On May 24, 2021, the IRS filed a notice to appeal the Tax Court’s ruling to the United States Sixth Circuit Court of Appeals. In July 2022, the Sixth Circuit panel heard oral arguments, and on August 25, 2022, issued a ruling in favor of Eaton US, confirming that the IRS must abide by the terms of the APAs. The Sixth Circuit Court of Appeals ruling for tax years 2005-2006 also resolved the APA cancellation issue for the

d in Tax Court. Eaton US set its transfer prices for products sold between these affiliates at the same prices that Eaton US sells such products to third parties as required by two successive Advance Pricing Agreements (APAs) Eaton US entered into with the IRS that governed the 200

### What the price says

The price assumes cash profits grow 15.1% yearly over ten years; actual growth was 7.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); Ten-year compound average after fade. Initial solved rate 0.2060403026768146. Price 402.48; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 5.133804324555769 → FY2025 10.674846625766872. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $63.77 per share

- 2016-11: $66.51 per share

- 2016-12: $67.09 per share

- 2017-01: $70.78 per share

- 2017-02: $71.98 per share

- 2017-03: $74.15 per share

- 2017-04: $75.64 per share

- 2017-05: $77.38 per share

- 2017-06: $77.83 per share

- 2017-07: $78.25 per share

- 2017-08: $71.76 per share

- 2017-09: $76.79 per share

- 2017-10: $80.02 per share

- 2017-11: $77.78 per share

- 2017-12: $79.01 per share

- 2018-01: $83.97 per share

- 2018-02: $80.70 per share

- 2018-03: $79.91 per share

- 2018-04: $75.03 per share

- 2018-05: $76.58 per share

- 2018-06: $74.74 per share

- 2018-07: $83.17 per share

- 2018-08: $83.14 per share

- 2018-09: $86.73 per share

- 2018-10: $71.67 per share

- 2018-11: $76.94 per share

- 2018-12: $68.66 per share

- 2019-01: $76.25 per share

- 2019-02: $79.77 per share

- 2019-03: $80.56 per share

- 2019-04: $82.82 per share

- 2019-05: $74.49 per share

- 2019-06: $83.28 per share

- 2019-07: $82.19 per share

- 2019-08: $80.72 per share

- 2019-09: $83.15 per share

- 2019-10: $87.11 per share

- 2019-11: $92.50 per share

- 2019-12: $94.72 per share

- 2020-01: $94.47 per share

- 2020-02: $90.72 per share

- 2020-03: $77.69 per share

- 2020-04: $83.50 per share

- 2020-05: $84.90 per share

- 2020-06: $87.48 per share

- 2020-07: $93.13 per share

- 2020-08: $102.10 per share

- 2020-09: $102.03 per share

- 2020-10: $103.79 per share

- 2020-11: $121.11 per share

- 2020-12: $120.14 per share

- 2021-01: $117.70 per share

- 2021-02: $130.19 per share

- 2021-03: $138.28 per share

- 2021-04: $142.93 per share

- 2021-05: $145.25 per share

- 2021-06: $148.18 per share

- 2021-07: $158.05 per share

- 2021-08: $168.36 per share

- 2021-09: $149.31 per share

- 2021-10: $164.76 per share

- 2021-11: $162.06 per share

- 2021-12: $172.82 per share

- 2022-01: $158.43 per share

- 2022-02: $154.29 per share

- 2022-03: $151.76 per share

- 2022-04: $145.02 per share

- 2022-05: $138.60 per share

- 2022-06: $125.99 per share

- 2022-07: $148.39 per share

- 2022-08: $136.64 per share

- 2022-09: $133.36 per share

- 2022-10: $150.07 per share

- 2022-11: $163.45 per share

- 2022-12: $156.95 per share

- 2023-01: $162.21 per share

- 2023-02: $174.93 per share

- 2023-03: $171.34 per share

- 2023-04: $167.12 per share

- 2023-05: $175.90 per share

- 2023-06: $201.10 per share

- 2023-07: $205.32 per share

- 2023-08: $230.37 per share

- 2023-09: $213.28 per share

- 2023-10: $207.91 per share

- 2023-11: $227.69 per share

- 2023-12: $240.82 per share

- 2024-01: $246.08 per share

- 2024-02: $289.00 per share

- 2024-03: $312.68 per share

- 2024-04: $318.26 per share

- 2024-05: $332.85 per share

- 2024-06: $313.55 per share

- 2024-07: $304.79 per share

- 2024-08: $306.93 per share

- 2024-09: $331.44 per share

- 2024-10: $331.58 per share

- 2024-11: $375.42 per share

- 2024-12: $331.87 per share

- 2025-01: $326.44 per share

- 2025-02: $293.32 per share

- 2025-03: $271.83 per share

- 2025-04: $294.37 per share

- 2025-05: $320.20 per share

- 2025-06: $356.99 per share

- 2025-07: $384.72 per share

- 2025-08: $349.14 per share

- 2025-09: $374.25 per share

- 2025-10: $381.56 per share

- 2025-11: $345.89 per share

- 2025-12: $318.51 per share

- 2026-01: $351.42 per share

- 2026-02: $375.92 per share

- 2026-03: $357.67 per share

- 2026-04: $433.01 per share

- 2026-05: $400.60 per share

- 2026-06: $426.12 per share

- 2026-07: $415.20 per share

- 2026-08: $401.88 per share

- 2026-09: $429.71 per share

- 2026-10: $428.31 per share

## Annual estimated value (USD per share)

- FY2016: low $48.90 per share, central $55.53 per share, high $64.36 per share

- FY2017: low $58.91 per share, central $66.82 per share, high $77.35 per share

- FY2018: low $62.18 per share, central $70.75 per share, high $82.16 per share

- FY2019: low $65.53 per share, central $74.52 per share, high $86.47 per share

- FY2020: low $58.49 per share, central $66.30 per share, high $76.70 per share

- FY2021: low $63.07 per share, central $71.71 per share, high $83.21 per share

- FY2022: low $66.71 per share, central $75.85 per share, high $88.03 per share

- FY2023: low $82.84 per share, central $93.52 per share, high $107.74 per share

- FY2024: low $90.37 per share, central $102.28 per share, high $118.14 per share

- FY2025: low $104.79 per share, central $119.15 per share, high $138.26 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:34:04.033Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1551182/000155118226000007/etn-20251231.htm); period 2025-12-31, filed 2026-02-26.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.