ETN
Eaton Corporation plc
$436.11
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 148.4% above fair value
You pay
$436.11
Bear
$153.59
Fair
$175.54
Bull
$197.48
Bear
$153.59
-64.8%
$10.46 × 15x P/E
Fair
$175.54
-59.7%
$10.46 × 17x P/E
Bull
$197.48
-54.7%
$10.46 × 19x P/E
Adjust Assumptions
16.8x
10.46$
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
41.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (40 analysts)
$502.38
Divergence from AlphaVal
65%
Summary
Applying a 17x P/E to adjusted EPS of $10.46, the base-case value is $175.54 per share. DDM cross-check: $279.83.
Warnings
Dividend-based valuation: $279.83 (above our primary estimate by 59%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $502.38 (from 40 analysts). Our estimate is 65% 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