Eaton Corporation plc (ETN) Intrinsic Value & DCF Valuation
Industrial - Machinery · NYSE
Current Price
$409.12
Intrinsic Value
$508.54
+19.6% margin of safety
What Is Eaton Corporation plc's Intrinsic Value?
As of 2026-06-15, our base-case DCF model estimates the intrinsic value of Eaton Corporation plc (ETN) at $508.54 per share, compared with a market price of $409.12, a margin of safety of +19.6%. The base case assumes 14.4% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $427.44 to $600.22. 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 our DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Eaton Corporation plc (ETN) Undervalued?
At $409.12, ETN trades about 19.6% below our base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety we require before calling a stock undervalued.
COMPETITIVE MOAT
↑Electrification Expertise
Eaton's deep expertise in electrical systems and power management solutions is critical for the growing data center and AI infrastructure. This specialized knowledge creates a barrier to entry for competitors.
↑Diversified Industrial Portfolio
The company's broad range of products across aerospace, electrical, and e-mobility segments provides resilience. This diversification mitigates risks associated with any single market downturn.
↑Brand Reputation & Trust
Eaton has built a strong reputation for reliability and quality in industrial machinery. This trust is essential for critical infrastructure projects where failure is not an option.
INVESTMENT RISKS
↓Premium Valuation Concerns
The stock's recent rally driven by AI demand may have pushed its valuation to a premium. Investors might face a wait for a more attractive entry point if growth expectations are not met.
↓Supply Chain Volatility
As an industrial manufacturer, Eaton is susceptible to disruptions in global supply chains. Shortages or price increases of raw materials can impact production and profitability.
↓Intense Competition
The industrial machinery sector is highly competitive. While Eaton has moats, rivals can still challenge market share through innovation and pricing strategies.
Base case
ETN base case valuation
Intrinsic Value
$508.54
Margin of safety
+19.6%
Expected annual return
+4.4%
Base case assumptions: 14.4% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-06-15.
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 Corporation plc, established in 1911 and headquartered in Dublin, Ireland, functions as an international enterprise specializing in power management solutions. The company's Electrical Americas and Global division supplies a comprehensive array of electrical and industrial components. This encompasses power distribution and assembly systems, residential products, advanced power quality and connectivity devices, wiring components, and circuit protection. Additionally, it offers utility power distribution equipment, power reliability services, and specialized equipment for demanding environments, including hazardous duty electrical gear, emergency lighting, fire detection systems, explosion-proof instrumentation, and structural support systems. Through its Aerospace segment, Eaton provides crucial systems and parts for both commercial and military aircraft manufacturers, associated aftermarket services, and various industrial applications. Its offerings include hydraulic and electro-hydraulic components (such as pumps, motors, power units, hoses, and fittings), flight control systems (like valves, actuators, sensors, flap and slat systems, and nose wheel steering), fluid conveyance products (hoses, tubing, fittings, and sealing/ducting products), fuel management solutions (air-to-air refueling, pumps, and inerting products), oxygen generation systems, thermal management products, and wiring connectors and cables. This segment also produces filters, strainers, cartridges, and golf grips. The Vehicle segment caters to the automotive industry with essential powertrain and engine components. These include transmissions, clutches, hybrid power systems, superchargers, engine valves and valve actuation systems, locking and limited-slip differentials, transmission controls, and fuel vapor components. Lastly, the eMobility segment is dedicated to advanced electrification solutions for vehicles. Its product range features voltage inverters and converters, onboard chargers, fuses, circuit protection units, vehicle control systems, power distribution systems, fuel tank isolation valves, and hybrid systems for commercial vehicles.
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
33.8x
EV/EBITDA
28.9x
FCF Yield
2.96%
Debt/Equity
1.10x
Based on trailing twelve-month data, ETN shows a free cash flow per share of $12.09 and a ROIC of 9.2%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 33.8x and FCF yield of 2.96% are important context metrics when evaluating ETN's stock valuation relative to peers.
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 $409.12, 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 33.8x with a free cash flow yield of 2.96%. 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 Industrial - Machinery 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 Industrial - Machinery 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 28.9x, 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 2026-06-15. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.