Eaton Corporation plc (ETN) Intrinsic Value & DCF Valuation
Electrical Equipment & Parts · NYSE
Current Price
$361.88
Intrinsic Value
$482.92
+25.1% margin of safety
What Is Eaton Corporation plc's Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of Eaton Corporation plc (ETN) at $482.92 per share, compared with a market price of $361.88, a margin of safety of +25.1%. The base case assumes 13.1% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $405.7 to $570.29. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Eaton Corporation plc (ETN) Undervalued?
At $361.88, ETN trades about 25.1% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Brand and Reputation
Eaton's long-standing reputation for quality and reliability in electrical components builds trust with customers. This established brand recognition fosters customer loyalty and can command premium pricing.
↑Switching Costs in Infrastructure
For large-scale industrial and utility clients, switching electrical infrastructure providers involves significant cost and complexity. Eaton's integrated solutions create inertia, making it difficult for competitors to displace them.
↑Global Distribution Network
Eaton possesses an extensive global sales and service network. This broad reach allows them to serve diverse markets efficiently and provide localized support, a significant barrier for smaller competitors.
INVESTMENT RISKS
↓Supply Chain Volatility
Global supply chain disruptions can impact raw material availability and manufacturing costs. This can lead to production delays and affect Eaton's ability to meet demand, impacting profitability.
↓Regulatory and Policy Changes
Evolving environmental regulations and energy policies can influence demand for certain products. Changes in government incentives or mandates could necessitate significant strategic adjustments.
↓Economic Downturns
A slowdown in global economic activity can reduce capital expenditures by industrial and commercial customers. This could lead to decreased demand for Eaton's electrical equipment and solutions.
Base case
ETN base case valuation
Intrinsic Value
$482.92
Margin of safety
+25.1%
Expected annual return
+5.9%
Base case assumptions: 13.1% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ETN valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Eaton Corporation plc respond.
Open DCF Calculator for ETNCompany Overview
Eaton Corp. Plc is a power management company, which provides energy-efficient solutions for electrical, hydraulic, and mechanical power. It operates through the following segments: Electrical Americas and Electrical Global; Aerospace, Vehicle, and eMobility. The Electrical Americas and Electrical Global segments engage in sales contracts for electrical components, industrial components, power distribution and assemblies, residential products, single and three phase power quality, wiring devices, circuit protection, utility power distribution, power reliability equipment, and service. The Aerospace segment supplies aerospace fuel, hydraulics, and pneumatic systems for commercial and military use. The Vehicle segment deals with the design, manufacture, marketing, and supply of drivetrain and powertrain systems and critical components that reduce emissions and improve fuel economy, stability, performance and safety of cars, light trucks and commercial vehicles. The eMobility segment designs, manufactures, markets, and supplies electrical and electronic components and systems that improve the power management and performance of both on-road and off-road vehicles. The company was founded in 1911 and is headquartered in Dublin, Ireland.
Financial Metrics — ETN Stock Valuation Data
Revenue/Share (TTM)
$73.47
FCF/Share (TTM)
$12.09
ROIC (TTM)
9.2%
ROE (TTM)
20.8%
P/FCF
29.9x
EV/EBITDA
26.0x
FCF Yield
3.34%
Debt/Equity
1.10x
On a trailing twelve-month basis, ETN generates free cash flow per share of $12.09 alongside a ROIC of 9.2%, both central inputs for a DCF valuation. Its P/FCF ratio of 29.9x and FCF yield of 3.34% then frame how ETN is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of ETN?
Eaton Corporation plc currently generates $12.09 in free cash flow per share. At the current price of $361.88, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is ETN undervalued?
ETN trades at a P/FCF ratio of 29.9x with a free cash flow yield of 3.34%. This P/FCF is in a moderate range. However, whether ETN is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value ETN stock using DCF?
To perform a DCF valuation on Eaton Corporation plc: (1) Start with the trailing free cash flow per share ($12.09) as the base, (2) project future FCF growth over 5-10 years based on Electrical Equipment & Parts industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting ETN's risk profile — with a debt-to-equity of 1.10x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to ETN?
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 company will produce over the next 5-10 years, shaped by Electrical Equipment & Parts trends, then discounting those amounts to today's dollars. ETN's ROIC of 9.2% shows moderate capital returns.
How does WACC affect ETN stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For ETN, with a debt-to-equity ratio of 1.10x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 26.0x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See ETN PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Industrials valuationsDCF and P/E value ETN with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.