Eaton Earnings: Infrastructure Spending and Energy Transition Power Electrical Supercycle

After reviewing narrow-moat-rated Eaton’s first-quarter results, we've lifted our fair value estimate by 7% to $176 per share. The company is performing exceptionally well, pacing ahead of our expectations and its own medium-term targets. Even after revising our estimates, we think there’s some noticeable conservatism in parts of management’s guidance (though there’s also some optimism, like operating margin aspirations for the eMobility segment, which rarely seems to consistently break even).