ETN Should I Buy
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Eaton Corporation PLC (ETN) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown strong financial performance and demand for its products, the lack of clear positive trading signals, cautious congressional trading activity, and mixed analyst sentiment suggest waiting for a better entry point.
The stock shows bullish moving averages (SMA_5 > SMA_20 > SMA_200), and the MACD is positive but contracting. RSI is neutral at 74.955. Key support is at 350.249, and resistance is at 399. The stock is trading near resistance, which may limit immediate upside potential.
Strong Q4 financial performance with revenue up 13.06% YoY, net income up 16.58% YoY, and EPS up 18.78% YoY.
Eaton's backlog is expected to grow by 34% in 2024 due to strong demand from data center clients.
Analysts from Morgan Stanley and RBC Capital have raised price targets and highlighted strong demand and growth potential.
Congress members have shown a cautious stance, with 4 recent sale transactions and no purchases.
UBS downgraded the stock, citing limited opportunities for positive estimate revisions in the near term.
Gross margin dropped by 5.42% YoY in Q4
The stock's immediate price trend is negative, with a regular market change of -1.45%.
In Q4 2025, Eaton reported strong growth: Revenue increased by 13.06% YoY to $7.055 billion, net income rose by 16.58% YoY to $1.132 billion, and EPS grew by 18.78% YoY to $2.91. However, gross margin declined by 5.42% YoY to 36.82%.
Analyst sentiment is mixed. Morgan Stanley and RBC Capital raised price targets, citing strong demand and growth potential. However, UBS downgraded the stock due to limited opportunities for estimate revisions, and Barclays and Bernstein lowered their price targets, reflecting valuation compression and cyclical downturn concerns.
