1-Star Price
PREMIUM
5-Star Price
PREMIUM
Economic Moat
PREMIUM
Capital Allocation
PREMIUM
Narrow-moat-rated Eaton had a very strong first quarter, and the firm blew past the assumptions embedded in management’s full-year guide, as well as analyst estimates. After reassessing our own estimates, we lift our fair value estimate by nearly 8%, or to $125 per share from $116 previously. Aside from revised guidance, we also raised our estimates due to Eaton closing the Tripp Lite acquisition early.
Eaton is a diversified power management company operating for over 100 years. The company operates through various segments, including electrical products, electrical systems and services, aerospace, vehicle, and most recently, e-mobility. Eaton’s portfolio can broadly be divided into two halves. One part of its portfolio is housed under its industrial sector umbrella, which serves a large variety of end markets like commercial vehicles, general aviation, and trucks, among others. The other portion is Eaton’s electrical sector portfolio, which serves data centers, utilities, and the residential end market, among others. While the company receives favorable tax treatment as a domiciliary of Ireland, most of its operations take place in the U.S.
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