Eaton Corp PLC

ETN: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$293.00	Znl	Csgwsxpy

Eaton: Upgrading to Wide Economic Moat Rating; Outsize Demand Likely Already Recognized by Market

Aug 20, 2024

After taking a fresh look at Eaton, we’ve increased the firm’s fair value estimate to $281 per share from $229, stemming primarily from an economic moat rating upgrade from narrow to wide that extends the duration we believe Eaton can outearn its cost of capital. Eaton is a massive beneficiary of both short- and long-term trends that have created maintainable outsize demand for the company’s products. Some of these trends include the explosion of data center buildouts and energy grid investments positively inflecting demand for Eaton’s electrical products and the ongoing narrowbody plane shortage driving supernormal commercial aviation aftermarket growth.

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