Eaton Corporation plc (ETN)
Quantitative Summary
DeterministicETN trades at 39.2x earnings, roughly in line with its sector average of 44.7x. Financial health metrics are strong: Piotroski 7/9, Altman Z 5.8 (above 3.0 safe zone threshold). DCF fair value of $229 implies 43% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics of this industrial leader present a nuanced picture where strong operational metrics are tempered by capital efficiency constraints. While the DuPont decomposition reveals that earnings power is primarily driven by robust net margins at 14.9% rather than asset turnover or leverage, the ROIC-WACC spread of merely +1.3% indicates limited excess value creation relative to the cost of capital. Quality screens reinforce this duality; a Piotroski F-Score of 7/9 and an Altman Z-Score of 5.3 suggest solid financial health with low distress risk, yet the Beneish M-Score of -2.37 flags potential earnings manipulation concerns that warrant scrutiny despite the high gross margin expansion to 37.6%.
Valuation metrics currently reflect a premium pricing environment where the market appears optimistic about future cash flow generation rather than current profitability quality. The stock trades at 34.6x forward earnings, exceeding both its historical range and the sector average of 32.1x, which aligns with a DCF model implying sustained free cash flow growth over ten years at an annualized rate of 20.3%. However, this aggressive pricing results in a significant negative gap between current market levels and the calculated fair value of $231, suggesting investors are paying for substantial upside potential that may not be immediately supported by fundamental returns on invested capital.
Risk factor analysis introduces conflicting signals regarding future performance sustainability. Although the stock exhibits positive Fama-French alpha of 1.26% annually, indicating outperformance relative to size and value factors, it simultaneously displays a negative tilt in both profitability (-0.178) and value dimensions. This divergence is further complicated by insider activity showing $5.49 million in net selling over the last ninety days, creating a counterweight to the growth narrative embedded in the high implied FCF expansion rates.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 10% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 9.6% | 11.6% | 13.6% |
|---|---|---|---|
| 2% | $276 | $208 | $164 |
| 3% | $313 | $229 | $178 |
| 4% | $364 | $256 | $194 |
Center = base case. Green = >10% upside, Red = >10% downside vs $417.62.
Pre-computed DCF: WACC=11.6%, terminal growth 3%. Fair value $229 (-43.2%). Not investment advice.
Valuation Context
Currently trading 19% above its 5-year average P/E of 32.5x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedThe current price action for Eaton Corporation plc at $371.88 suggests a period of consolidation where larger market participants may be accumulating or distributing positions with varying degrees of conviction. While specific short-term moving average crossovers are not detailed in the provided snapshot, the stability near this level often indicates that institutional holders are monitoring key support and resistance zones closely rather than engaging in aggressive directional betting. In sectors like Industrials, such price stagnation frequently precedes a breakout or breakdown as major players adjust their exposure based on broader macroeconomic signals or earnings expectations not visible here. Volume trends accompanying these price levels would typically serve as the primary filter for institutional intent; high volume near current support could imply defensive positioning by long-term holders aiming to defend established values, whereas declining volume might suggest a lack of immediate urgency among large capital allocators. The absence of sharp volatility in this summary points toward a strategic pause where sophisticated investors are likely weighing fundamental catalysts against technical thresholds before committing significant new capital. Consequently, the market structure appears to be testing the resolve of dominant players who may be waiting for clearer confirmation signals before initiating substantial trades that could disrupt the current equilibrium.
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-05-08 | $1.1000 | 0.0% |
| 2026-03-10 | $1.1000 | +5.8% |
| 2025-11-05 | $1.0400 | 0.0% |
| 2025-08-07 | $1.0400 | 0.0% |
| 2025-05-05 | $1.0400 | 0.0% |
| 2025-03-10 | $1.0400 | +10.6% |
| 2024-11-04 | $0.9400 | 0.0% |
| 2024-08-05 | $0.9400 | 0.0% |
| 2024-05-03 | $0.9400 | 0.0% |
| 2024-03-08 | $0.9400 | +9.3% |
| 2023-11-03 | $0.8600 | 0.0% |
| 2023-08-04 | $0.8600 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XLI or VIS, the fund manager is mechanically forced to buy or sell ETN shares regardless of Eaton Corporation plc's individual fundamentals. We estimate $16.2B of passive capital is structurally linked to ETN through 8 tracked ETFs. This substantial passive exposure means that ETF inflows and outflows — not company fundamentals — can dominate daily volume on this stock.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Eaton Corporation plc to visualize passive redemption contagion across ETFs and collateral stocks.
If Eaton Corporation plc (ETN) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies Caterpillar Inc. (CAT) as the most exposed collateral stock, sharing 2 ETFs with ETN. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 19 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
ETN Ownership Dynamics
Passive funds hold 1 in every 10 ETN shares, reducing daily market volatility.
Eaton Corporation plc (ETN) exerts measurable gravity on the passive index market, currently representing 2.8% of the State Street Industrial Select Sector SPDR ETF (XLI) and 2.4% of the VIS (VIS). Across 17 tracked ETFs, approximately 39M shares (10.1% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest ETN Exposure
Float lock-up computed from 17 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
ETN Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Eaton Corporation plc over the past year sits near $357.06 (11% of 252-day volume). The current price of $417.62 trades 17.0% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
ETN Capital Efficiency
How efficiently does Eaton Corporation plc convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Eaton Corporation plc converts 58% of its EBITDA into free cash flow, a healthy conversion rate indicating efficient capital management — the business generates substantial cash after reinvestment. The positive ROIC-WACC spread of 1.3% confirms that reinvested capital creates shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-14 | 2,411 | $406.94 | $981,132.34 |
| 2026-05-08 | 30,159 | $399.15 | $12.0M |
| 2026-05-04 | 90 | $425.55 | $38,299.5 |
| 2026-04-24 | 4,210 | $424.50 | $1.8M |
| 2026-04-20 | 4,891 | $406.21 | $2.0M |
| 2026-04-15 | 3 | $401.90 | $1,205.7 |
| 2026-04-06 | 5,370 | $361.10 | $1.9M |
| 2026-03-30 | 242 | $357.36 | $86,481.12 |
| 2026-03-25 | 39 | $374.10 | $14,589.9 |
| 2026-03-23 | 2 | $356.80 | $713.6 |
| 2026-03-13 | 54,833 | $348.64 | $19.1M |
| 2026-03-05 | 25 | $354.46 | $8,861.5 |
| 2026-03-04 | 10 | $355.56 | $3,555.6 |
| 2026-02-23 | 672 | $373.38 | $250,911.36 |
| 2026-02-17 | 4,700 | $389.25 | $1.8M |
| 2026-02-12 | 1,799 | $396.09 | $712,565.91 |
| 2026-02-11 | 5,694 | $377.47 | $2.1M |
| 2026-02-02 | 1 | $351.42 | $351.42 |
| 2026-01-29 | 135 | $347.32 | $46,888.2 |
| 2026-01-26 | 200 | $331.22 | $66,244 |
| 2026-01-20 | 5,670 | $343.75 | $1.9M |
| 2026-01-15 | 14 | $331.14 | $4,635.96 |
| 2025-12-22 | 21 | $317.80 | $6,673.8 |
| 2025-12-19 | 24 | $315.95 | $7,582.8 |
| 2025-12-18 | 2,790 | $315.82 | $881,137.8 |
| 2025-12-11 | 118 | $353.45 | $41,707.1 |
| 2025-12-09 | 45,396 | $343.39 | $15.6M |
| 2025-12-08 | 29 | $337.66 | $9,792.14 |
| 2025-12-02 | 17 | $339.71 | $5,775.07 |
| 2025-12-01 | 1 | $345.89 | $345.89 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| VRT | 0.732 | 0.735 | High co-movement |
| TSM | 0.660 | 0.653 | Moderate |
| PWR | 0.655 | 0.657 | Moderate |
| CAT | 0.642 | 0.701 | Moderate |
| LRCX | 0.629 | 0.680 | Moderate |
| MPWR | 0.628 | 0.679 | Moderate |
| CMI | 0.613 | 0.668 | Moderate |
| FIX | 0.611 | 0.629 | Moderate |
| GEV | 0.609 | 0.644 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare ETN to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.