Morgan Stanley's Joshua Pokrzywinski raised their price target on Eaton (NYSE: ETN) by 1.3% from $235 to $238 on 2023/09/25. The analyst maintained their Strong Buy rating on the stock.
According to Pokrzywinski, Eaton management's commentary at the Morgan Stanley 10th Annual Laguna Conference held on September 14, 2023, "continues to support a strong megaproject and electrification environment." This positive outlook suggests that Eaton's business is well-positioned to benefit from the ongoing shift towards electrification in various sectors.
The analyst also pointed out that while the backlog is expected to level off until the wave of orders in 2024, supply could be a bigger limiting factor than demand. This indicates that Eaton may face challenges in meeting the expected demand for its products and services, highlighting the importance of efficient supply chain management.
Pokrzywinski further argued that the current consensus forecast for fiscal years 2024 and 2025 appears to be conservative. Despite considering the context of portfolio growth, the analyst believes that the consensus estimate is "low." This suggests that Eaton's potential for growth and earnings may be underestimated by the market.
Currently, 77.8% of top-rated analysts rate ETN as a Strong Buy or Buy, indicating widespread optimism about the stock. Meanwhile, 11.1% see it as a Hold, and another 11.1% either recommend or strongly recommend selling the stock. These ratings reflect the diversity of opinions among analysts regarding Eaton's future performance.
The consensus forecast among analysts is that Eaton's upcoming year will deliver earnings per share (EPS) of $7.88. If the analysts' predictions come true, this would represent a 16% increase in EPS on a year-over-year basis, indicating potential growth for the company.
In terms of stock performance, since Eaton's last quarterly report on June 30, 2023, the stock price has risen by 5.7%. On a year-over-year basis, the stock has surged by an impressive 57.4%. These numbers highlight the positive momentum that Eaton has experienced, outpacing the broader market represented by the S&P 500, which has risen by 15.4% during the same period.
Joshua Pokrzywinski, the Morgan Stanley analyst who issued the rating and price target, is ranked in the top 3% of Wall Street analysts by WallStreetZen. With an average return of 6.9% and a win rate of 56.9%, Pokrzywinski specializes in the Technology, Basic Materials, and Industrials sectors. This expertise adds credibility to their analysis and rating.
Eaton Corporation plc describes itself as a power management company. The company offers various products and solutions across its different segments. In the Electrical segment, Eaton provides power distribution assemblies, wiring devices, emergency lighting, and fire detection components, among others. The Aerospace segment supplies flap and slat systems, nose wheel steering systems, air-to-air refueling systems, and other components to aircraft manufacturers. In the Vehicle segment, Eaton offers transmissions, hybrid power systems, differentials, and other automotive components. The eMobility segment focuses on voltage inverters, onboard chargers, and commercial vehicle hybrid systems, among other components. Eaton Corporation was founded in 1911 and has its headquarters in Dublin, Ireland.
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