Industrial - Machinery · NYSE
Current Price
$410.77
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Eaton Corporation plc with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Eaton Corporation plc operates as a power management company worldwide. The company's Electrical Americas and Electrical Global segment provides electrical components, industrial components, power distribution and assemblies, residential products, single and three phase power quality and connectivity products, wiring devices, circuit protection products, utility power distribution products, power reliability equipment, and services, as well as hazardous duty electrical equipment, emergency lighting, fire detection, explosion-proof instrumentation, and structural support systems. Its Aerospace segment offers pumps, motors, hydraulic power units, hoses and fittings, and electro-hydraulic pumps; valves, cylinders, electronic controls, electromechanical actuators, sensors, aircraft flap and slat systems, and nose wheel steering systems; hose, thermoplastic tubing products, fittings, adapters, couplings, and sealing and ducting products; air-to-air refueling systems, fuel pumps, fuel inerting products, sensors, valves, and adapters and regulators; oxygen generation system, payload carriages, and thermal management products; and wiring connectors and cables, as well as hydraulic and bag filters, strainers and cartridges, and golf grips for manufacturers of commercial and military aircraft, and related after-market customers, as well as industrial applications. The company's Vehicle segment offers transmissions, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, locking and limited slip differentials, transmission controls, and fuel vapor components for the vehicle industry. Its eMobility segment provides voltage inverters, converters, fuses, onboard chargers, circuit protection units, vehicle controls, power distribution systems, fuel tank isolation valves, and commercial vehicle hybrid systems. Eaton Corporation plc was founded in 1911 and is based in Dublin, Ireland.
ROIC (TTM)
13.1%
ROE (TTM)
21.7%
FCF Yield
2.81%
Based on trailing twelve-month data, ETN shows a free cash flow per share of N/A and a ROIC of 13.1%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 2.81% are important context metrics when evaluating ETN's stock valuation relative to peers.
The intrinsic value of ETN depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether ETN is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $410.77. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Eaton Corporation plc: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Industrial - Machinery industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting ETN's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Eaton Corporation plc, this means projecting how much free cash flow the Industrial - Machinery will produce over the next 5-10 years, then discounting those amounts to today's dollars. ETN's ROIC of 13.1% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For ETN, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
