Eaton Corporation plc (ETN) Stock Valuation — PE Analysis
Industrial - Machinery · NYSE
Current Price
$391.39
PE Ratio (TTM)
38.1x
Intrinsic Value
$532.08
+26.4% margin of safety
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 PE valuation
A base case PE valuation for ETN estimates a fair value of about $532.08 per share, against a current price of $391.39. The model assumes 14.4% annual earnings growth, a 38x target PE multiple, and a 10% discount rate.
Intrinsic Value
$532.08
Margin of safety
+26.4%
Expected annual return
+6.3%
Base case assumptions: 14.4% annual earnings growth, 38x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ETN PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Eaton Corporation plc respond.
Open PE 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 PE Stock Valuation Data
PE Ratio (TTM)
38.1x
PEG Ratio
12.22
Earnings Yield
2.63%
ROE (TTM)
20.8%
Revenue/Share (TTM)
$73.47
Dividend Yield
1.09%
Debt/Equity
1.10x
Frequently Asked Questions
What is the PE ratio of ETN?
The trailing twelve-month PE ratio of ETN reflects how much investors pay per dollar of Eaton Corporation plc's earnings. This metric is most useful when compared to Industrial - Machinery peers and the company's own historical range.
Is ETN overvalued based on PE ratio?
ETN's PE of 38.1x combined with a PEG ratio of 12.22 provides a growth-adjusted perspective. A PEG above 2.0 suggests ETN may be richly valued even accounting for growth. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Industrial - Machinery, a DCF analysis may be more appropriate.
How do I value ETN stock using PE ratio?
To value Eaton Corporation plc using PE: (1) Compare the current PE (38.1x) against the Industrial - Machinery median to assess relative pricing, (2) check the PEG ratio (12.22) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of ETN?
ETN's PEG ratio is 12.22, calculated by dividing the PE ratio (38.1x) by the expected earnings growth rate. A PEG above 2.0 often signals the stock is priced aggressively relative to its growth trajectory. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for ETN stock valuation?
PE ratio gives a quick relative read — how ETN is priced versus Industrial - Machinery peers. DCF provides an absolute value based on projected free cash flows. For ETN, with a strong ROE of 20.8%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See ETN DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Industrials valuationsP/E and DCF value ETN with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.