0Y3K.L
Eaton Corporation plc
$393.01
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 116.7% above fair value
You pay
$393.01
Bear
$145.12
Fair
$181.39
Bull
$217.67
Bear
$145.12
-63.1%
$11.53 × 13x P/E
Fair
$181.39
-53.8%
$11.53 × 16x P/E
Bull
$217.67
-44.6%
$11.53 × 19x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
34.1x
Summary
Applying a 16x P/E to adjusted EPS of $11.53, the base-case value is $181.39 per share. DDM cross-check: $282.91.
Warnings
Dividend-based valuation: $282.91 (above our primary estimate by 56%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples