ETN
Eaton Corporation plc
$398.52
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 48.6% above fair value
You pay
$398.52
Bear
$234.68
Fair
$268.20
Bull
$301.73
Bear
$234.68
-41.1%
$11.54 × 15x P/E
Fair
$268.20
-32.7%
$11.54 × 17x P/E
Bull
$301.73
-24.3%
$11.54 × 19x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
34.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $442.14 from 39 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $268.20 per share.
Warnings
Dividend-based valuation: $282.91 (above our primary estimate by 46%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $442.14 (from 39 analysts). Our estimate is 56% below the consensus -- consider that gap carefully.
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