Eaton (ETN) Stock Forecast & Price Target

Eaton Corp is anticipated to experience organic sales growth of approximately 5.5%-7.5% year-over-year, with projections of around 7% in the first half of 2025 and 9% in the second half, buoyed by increased capacity and market recovery. The company's long-term outlook includes a compounded annual growth rate (CAGR) for organic revenues between 6-9%, alongside a significant improvement in segment operating margins, expected to rise by 350-450 basis points by 2025. Additionally, Eaton's datacenter business has shown robust performance, with a 45% year-over-year increase in 2024, driven largely by hyperscaler demand, suggesting sustained growth potential as US hyperscalers are projected to increase capital expenditures substantially in the coming years.

Eaton Corp is experiencing a decline in various segments, with notable reductions of 7% in commercial vehicles and 6% in the residential sector, contrary to previous expectations. Additionally, the eMobility segment has seen a decline of 10%, raising concerns about the sustainability of growth given the pressures from external factors like Hurricane Helene and labor strikes within the aerospace industry. The company also faces potential disappointment in its datacenter business as elevated expectations could be recalibrated if order rates normalize, indicating a possible weakening in revenue streams.