1. Eaton Corporation plc (NYSE:ETN)
Number of Hedge Fund Investors: 93
Eaton Corporation plc (NYSE:ETN) is a multinational power management company, headquartered in Ireland. The company provides solutions for electrical, hydraulic, vehicle products, and mechanical power to various industries, including aerospace, automotive, and construction. Eaton Corporation plc (NYSE:ETN) focuses on energy efficiency and its products help reduce energy consumption, making the company a key player in power management and green energy solutions.
Eaton Corporation plc (NYSE:ETN) is well-positioned to benefit from the increasing demand for electrification, particularly in the data center and utility sectors. The company’s products are used in the transformation of energy from traditional fossil fuels to renewable energy sources, which is a growing trend in the industry. Additionally, the company’s aerospace business is driven by the growth in commercial and defense spending and is expected to continue in the coming years.
In Q3, Eaton Corporation plc (NYSE:ETN) delivered record-breaking financial performance, underscoring its strong operational efficiency and growth potential. The company achieved an all-time-high adjusted EPS of $2.84, marking a 15% increase from the previous year. This earnings milestone reflects the company’s ability to capitalize on demand and operate efficiently, further demonstrated by record segment margins of 24.3%, an increase of 70 basis points year-over-year.
Eaton Corporation plc’s (NYSE:ETN) revenue reached $6.3 billion, up 8% on both a total and organic basis. In Q3, the company generated $1.3 billion in operating cash flow, up 15% from the previous year, and $1.1 billion in free cash flow, representing a 23% year-over-year increase.
Looking forward, Eaton Corporation plc (NYSE:ETN) has provided optimistic guidance with an adjusted EPS forecast of $10.75 to $10.81 for 2024, representing an 18% growth. Additionally, the company projects double-digit market growth in 2025 across data centers, commercial aerospace, and electric vehicles.
Eaton Corporation plc (NYSE:ETN) is investing heavily to meet this demand, with manufacturing capacity investments now totaling $1.5 billion, up $500 million from previous estimates. Eaton Corporation plc (NYSE:ETN) is poised for strong growth supported by record financial performance, an expanding backlog, and strategic investments in high-growth sectors.
While we acknowledge the potential of Eaton Corporation plc (NYSE:ETN) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ETN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
