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Eaton Corp PLC
ETN : NYSE : Industrial Goods
$55.30 | %
Today's Range: 0.00 - 0.00
Avg. Daily Volume: 3,525,100
10/08/15 - 4:04 PM ET

Financial Analysis

EATON CORP PLC's gross profit margin for the second quarter of its fiscal year 2015 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. EATON CORP PLC has weak liquidity. Currently, the Quick Ratio is 0.84 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 7.23% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY15 Q2 FY14
Net Sales ($mil)5372.05767.0
EBITDA ($mil)873.0847.0
EBIT ($mil)639.0597.0
Net Income ($mil)535.0171.0

Balance Sheet Q2 FY15 Q2 FY14
Cash & Equiv. ($mil)430.01265.0
Total Assets ($mil)32579.035258.0
Total Debt ($mil)8751.09033.0
Equity ($mil)15753.016982.0

Profitability Q2 FY15 Q2 FY14
Gross Profit Margin35.9534.54
EBITDA Margin16.2514.68
Operating Margin11.910.35
Sales Turnover0.670.64
Return on Assets6.74.53
Return on Equity13.869.41
Debt Q2 FY15 Q2 FY14
Current Ratio1.511.59
Interest Expense59.055.0
Interest Coverage10.8310.85

Share Data Q2 FY15 Q2 FY14
Shares outstanding (mil)467.5475.9
Div / share0.550.49
Book value / share33.735.68
Institutional Own % n/a n/a
Avg Daily Volume3329271.02404116.0


BUY. The current P/E ratio indicates a significant discount compared to an average of 21.27 for the Electrical Equipment industry and a discount compared to the S&P 500 average of 19.38. To use another comparison, its price-to-book ratio of 1.50 indicates a discount versus the S&P 500 average of 2.58 and a significant discount versus the industry average of 3.19. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, EATON CORP PLC proves to trade at a discount to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
ETN 10.95 Peers 21.27   ETN 12.45 Peers 15.09

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

ETN is trading at a significant discount to its peers.


Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

ETN is trading at a discount to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
ETN 10.22 Peers 16.66   ETN 0.60 Peers 1.20

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

ETN is trading at a significant discount to its peers.


Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

ETN trades at a significant discount to its peers.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ETN 1.50 Peers 3.19   ETN 37.91 Peers 9.37

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

ETN is trading at a significant discount to its peers.


Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

ETN is expected to have an earnings growth rate that significantly exceeds its peers.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ETN 1.08 Peers 2.03   ETN -2.26 Peers 0.80

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

ETN is trading at a significant discount to its industry on this measurement.


Lower. A sales growth rate that trails the industry implies that a company is losing market share.

ETN significantly trails its peers on the basis of sales growth



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