In the latest market close, Eaton (ETN) reached $338.12, with a +0.74% movement compared to the previous day. This change lagged the S&P 500's 1.09% gain on the day. Elsewhere, the Dow saw an upswing of 1.18%, while the tech-heavy Nasdaq appreciated by 1.03%.
The power management company's stock has dropped by 9.52% in the past month, falling short of the Industrial Products sector's loss of 4.93% and the S&P 500's loss of 0.71%.
The investment community will be closely monitoring the performance of Eaton in its forthcoming earnings report. On that day, Eaton is projected to report earnings of $2.82 per share, which would represent year-over-year growth of 10.59%. Our most recent consensus estimate is calling for quarterly revenue of $6.37 billion, up 6.72% from the year-ago period.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $10.80 per share and a revenue of $25.01 billion, representing changes of +18.42% and +7.8%, respectively, from the prior year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Eaton. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. The Zacks Consensus EPS estimate has moved 0.01% higher within the past month. As of now, Eaton holds a Zacks Rank of #3 (Hold).
In terms of valuation, Eaton is currently trading at a Forward P/E ratio of 31.08. This expresses a premium compared to the average Forward P/E of 22.58 of its industry.
We can also see that ETN currently has a PEG ratio of 2.54. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Manufacturing - Electronics industry was having an average PEG ratio of 2.06.
The Manufacturing - Electronics industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 82, putting it in the top 33% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
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