Why Eaton Corp. (ETN) Stock Is Higher Today

NEW YORK (TheStreet) -- Shares of Eaton Corp.  (ETN) are up 2.27% to $79.32 after it agreed to pay ZF Meritor $500 million to settle an antitrust lawsuit ahead of a trial to determine damages in the case.

ZF Meritor is a joint venture between a Meritor (MTOR) subsidiary and ZF Friedrichshafen AG.

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Separately, TheStreet Ratings team rates EATON CORP PLC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate EATON CORP PLC (ETN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ETN's revenue growth has slightly outpaced the industry average of 6.4%. Since the same quarter one year prior, revenues slightly increased by 3.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • EATON CORP PLC has improved earnings per share by 16.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, EATON CORP PLC increased its bottom line by earning $3.90 versus $3.51 in the prior year. This year, the market expects an improvement in earnings ($4.75 versus $3.90).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Electrical Equipment industry average, but is less than that of the S&P 500. The net income increased by 16.1% when compared to the same quarter one year prior, going from $378.00 million to $439.00 million.
  • You can view the full analysis from the report here: ETN Ratings Report
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