In the latest trading session, Eaton (ETN) closed at $431.33, marking a -3.09% move from the previous day. This change lagged the S&P 500's 0.22% loss on the day. Meanwhile, the Dow lost 0.66%, and the Nasdaq, a tech-heavy index, lost 0.22%.
Prior to today's trading, shares of the power management company had gained 5.44% outpaced the Industrial Products sector's gain of 0.98% and the S&P 500's gain of 1.4%.
The investment community will be paying close attention to the earnings performance of Eaton in its upcoming release. It is anticipated that the company will report an EPS of $3.53, marking a 14.98% rise compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $8.43 billion, indicating a 20.65% increase compared to the same quarter of the previous year.
For the full year, the Zacks Consensus Estimates project earnings of $13.57 per share and a revenue of $32.68 billion, demonstrating changes of +12.43% and +19.06%, respectively, from the preceding year.
It is also important to note the recent changes to analyst estimates for Eaton. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.05% higher. Eaton is currently a Zacks Rank #2 (Buy).
In terms of valuation, Eaton is presently being traded at a Forward P/E ratio of 32.81. This denotes a premium relative to the industry average Forward P/E of 24.29.
Investors should also note that ETN has a PEG ratio of 2.58 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Manufacturing - Electronics industry had an average PEG ratio of 1.55 as trading concluded yesterday.
The Manufacturing - Electronics industry is part of the Industrial Products sector. This industry, currently bearing a Zacks Industry Rank of 68, finds itself in the top 28% echelons of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
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Eaton Corporation, PLC (ETN): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).