ETN
Eaton Corporation
Hybrid Industrial
★ Quality 50/100Price today
$410.66
what the market pays
Worth
$123.34
calculated cycle value
Price is 233% above its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Manufacturing + technology
$144.14
per share
How it's calculated
Eaton Corporation — high assistant confidence (2026-06-06). Review note.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Hybrid Industrial · vs 28 peers
You pay 47.5x times this business's cash flow; its sector median is 33.7x.
67% above what Charlie thinks it's worth (15.9x) — you're overpaying, sector or no sector.
Why Overvalued?
Its free cash flow is $9.08/share × 15.9x multiplier minus $20.80 in negative net cash = $123.34 in intrinsic value. Today's price of $410.66 is 70% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 233% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $117.17.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$98.67
-20% off Value
🟡 Discounted
≤$117.17
-5% off Value
🔴 Today
$410.66
-70% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
Once it's inside the data center, ripping out Eaton means redesigning everything.
Eaton makes electrical power management equipment: circuit breakers, transformers, distribution systems, and aerospace and industrial components. It earns by selling critical hardware for data centers, power grids, and buildings, with $27.4B in revenue and a 38% gross margin. The electrical business is the engine; aerospace and industrial fill out the rest.
The real moat is in the spec: once Eaton's equipment goes into a data center or a power grid, replacing it means redesigning and recertifying everything. Decades of installations generate recurring parts and service. It's not an impenetrable moat, but switching costs and regulatory reliability keep the cheap buyer away.
Revenue history
From $20.8B to $29.9B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $27.4B · FY2025
Of every $100 in sales, $85 goes to costs and operations; $15 is left as net profit (15% margin).
Catalysts and risks
AI data center demand pushing the electrical backlog, which already tops $14B.
U.S. grid electrification with billions from the IRA flowing through 2030.
Commercial aerospace recovery lifting segment margins toward 2026.
$8.8B in debt against just $0.6B in cash — little cushion if the cycle cools.
38% gross margin is decent, not exceptional; cost pressure in copper and labor.
The AI euphoria is already in the price; any slowdown in data center spending hits.
Charlie's note
“At 15.87x for a business growing 9% with a 38% gross margin and switching costs baked into the spec of every data center and grid, you're not overpaying for real quality. Patience here is rewarded by recurring service, not euphoria.”
Analysis · June 2026
So when would be a good price for Eaton Corporation?
By our calculation, not yet. We will email you the day it drops to $117.17 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.