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Eaton (ETN) Stock Sinks As Market Gains: Here's Why

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Eaton (ETN - Free Report) closed the most recent trading day at $300, moving -0.94% from the previous trading session. This change lagged the S&P 500's 0.16% gain on the day. On the other hand, the Dow registered a gain of 0.01%, and the technology-centric Nasdaq increased by 0.46%.

The power management company's shares have seen an increase of 4.48% over the last month, surpassing the Industrial Products sector's loss of 1.68% and the S&P 500's loss of 3.59%.

Analysts and investors alike will be keeping a close eye on the performance of Eaton in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $2.70, marking a 12.5% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $6.27 billion, reflecting a 5.43% rise from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $12.03 per share and revenue of $26.74 billion, indicating changes of +11.39% and +7.48%, respectively, compared to the previous year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts 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 company's business health and profitability.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.01% higher. Eaton currently has a Zacks Rank of #3 (Hold).

Investors should also note Eaton's current valuation metrics, including its Forward P/E ratio of 25.17. This expresses a premium compared to the average Forward P/E of 23.37 of its industry.

We can additionally observe that ETN currently boasts a PEG ratio of 2.43. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Manufacturing - Electronics industry had an average PEG ratio of 1.95.

The Manufacturing - Electronics industry is part of the Industrial Products sector. This industry, currently bearing a Zacks Industry Rank of 46, finds itself in the top 19% echelons of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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