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    ETN · NYQ · Industrials

    Eaton Corporation plc

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 192.66

    Market price

    USD 366.07

    Implied upside

    -47.4%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Current EV/EBITDA of 24.4x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 192.66-47.4%
    Exit multiple
    USD 362.99-0.8%
    Market price
    USD 366.07

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn7bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 32.9bnUSD 37.0bnUSD 41.1bnUSD 45.1bnUSD 49.0bnUSD 52.6bnUSD 55.9bnUSD 58.7bnUSD 60.9bnUSD 62.4bn+7.4%
    EBITUSD 5.7bnUSD 6.4bnUSD 7.1bnUSD 7.8bnUSD 8.4bnUSD 9.1bnUSD 9.6bnUSD 10.1bnUSD 10.5bnUSD 10.7bn+7.4%
    NOPATUSD 4.7bnUSD 5.3bnUSD 5.9bnUSD 6.5bnUSD 7.1bnUSD 7.6bnUSD 8.0bnUSD 8.4bnUSD 8.8bnUSD 9.0bn+7.4%
    Add depreciation & amortisationUSD 1.3bnUSD 1.5bnUSD 1.6bnUSD 1.8bnUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.3bnUSD 2.4bnUSD 2.5bn+7.4%
    Less capital expenditureUSD -1.0bnUSD -1.3bnUSD -1.6bnUSD -2.0bnUSD -2.4bnUSD -2.7bnUSD -3.1bnUSD -3.5bnUSD -3.9bnUSD -4.2bn+16.8%
    Capex, % of revenue3.2%3.6%4.0%4.4%4.8%5.2%5.6%6.0%6.4%6.8%-
    Less increase in working capitalUSD -1.2bnUSD -857.0mUSD -866.7mUSD -856.3mUSD -823.7mUSD -767.7mUSD -688.0mUSD -585.5mUSD -462.2mUSD -321.5m-13.2%
    Free cashflow to firmUSD 3.8bnUSD 4.6bnUSD 5.0bnUSD 5.5bnUSD 5.8bnUSD 6.2bnUSD 6.5bnUSD 6.7bnUSD 6.8bnUSD 6.9bn+6.7%
    Discount factor0.95710.87670.80310.73570.67390.61730.56550.51800.47450.4346-
    Present valueUSD 3.7bnUSD 4.0bnUSD 4.0bnUSD 4.0bnUSD 3.9bnUSD 3.8bnUSD 3.7bnUSD 3.5bnUSD 3.2bnUSD 3.0bn-
    Present Value Of The ForecastUSD 36.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.093Reported 1.139, pulled toward 1.0 (Blume)
    Cost of equity9.52%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 21.6x interest cover. Book interest / average debt was lower, at 2.4%.
    Market capitalisationUSD 142.2bn93.1% of capital
    Total debtUSD 10.5bn6.9% of capital, book value as a proxy
    Tax rate16.3%Effective, capped at statutory
    WACC9.17%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 192.66

    57% of EV

    Forecast FCFF, final year
    USD 6.9bn
    Capex at depreciation, working capital in reinvestment
    USD 9.0bn
    Less reinvestment at g/ROIC (19.6% of NOPAT)
    USD -1.8bn
    Capitalised
    USD 7.2bn
    ROIC (reported)
    12.8%
    Terminal value, undiscounted
    USD 111.0bn
    Terminal value, discounted
    USD 48.2bn
    Enterprise value
    USD 85.1bn
    Less net debt
    USD 9.7bn
    Equity value
    USD 75.4bn

    Exit at 20.0x EBITDA

    Value per shareUSD 362.99

    76% of EV

    Terminal value, undiscounted
    USD 264.3bn
    Terminal value, discounted
    USD 114.9bn
    Enterprise value
    USD 151.7bn
    Less net debt
    USD 9.7bn
    Equity value
    USD 142.0bn

    Spread between methods: 61%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.17%271.10278.62288.17300.51316.75
    8.17%224.55227.79231.94237.27244.15
    9.17%190.28191.26192.66194.59197.17
    10.17%164.03163.77163.70163.85164.28
    11.17%143.31142.35141.46140.67139.98

    Outlined: this model. Green text: above today's price of 366.07. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year9.8%8.6%16.5%
    EBIT margin19.0%17.2%30.3%
    Discount rate-9.2%6.3%
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.