ETN - Embedded Expectations Analysis - 2019 01 03
Eaton Corporation plc (ETN:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 12.8x Uniform P/E, implying bearish expectations for the firm. Moreover, management has concerns about their ability to offset increasing tariff pressures, margins in their Hydraulic segment, and share repurchasesSpecifically, management may be concerned about unfavorable trends in large project orders in the U.S, and may lack confidence in their ability to offset the impact of rising tariffs by increasing their prices. Also, they may be concerned about the current level of uncertainty in Chinese markets, and may be exaggerating their intent to increase share buybacks. Additionally, they may be concerned about compressing margins in their Hydraulics segment, and may lack confidence in their ability to meet revenue growth targets in the segment. They may also lack confidence in their ability to maintain elevated organic growth rates in their Aerospace segment, and may be concerned about their Q3 Electrical Products segment results
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