Jim Cramer’s Top Stock Picks: 10 Stocks with High Potential

4. Eaton Corporation plc (NYSE:ETN)

Number of Hedge Fund Investors: 93

Jim Cramer shared that Citi has started covering Eaton Corporation plc (NYSE:ETN), a Club holding, with a buy rating and a price target of $348 per share, suggesting about a 14% potential increase from Friday’s closing price. Citi analysts believe Eaton Corporation plc (NYSE:ETN) is set for significant earnings growth due to rising demand for data centers and other large projects. They also noted that internal improvements have boosted Eaton Corporation plc (NYSE:ETN)’s profitability.

“Industrial analysts at Citi initiated coverage of Club holding Eaton with a buy rating and price target of $348 a share, implying about 14% upside from Friday’s close. Analysts said the electrical equipment supplier is well-positioned for outsized earnings growth in the years ahead due to booming data center demand and other megaprojects. Internal actions have improved profitability as well, Citi said.”

Eaton Corporation plc (NYSE:ETN) is a strong investment choice due to its impressive financial performance, raised guidance, and growth potential in electrification, energy transition, and industrialization. In Q2 2024, Eaton Corporation plc (NYSE:ETN) reported a record-setting 33% year-over-year increase in earnings per share (EPS) to $2.48, with adjusted EPS rising 24% to $2.73. Eaton Corporation plc (NYSE:ETN) also saw a 9% rise in organic sales and achieved a record $946 million in operating cash flow.

Eaton Corporation plc (NYSE:ETN) has upgraded its full-year 2024 guidance, forecasting 8-9% organic growth, segment margins of 23.3%-23.7%, and EPS between $9.38 and $9.48, reflecting an 18% increase from the previous year. Its focus on power management and energy-efficient technologies positions it well to benefit from the global shift towards energy transition and electrification.

Additionally, strong growth in its Electrical and Aerospace segments supports a positive outlook. Analysts generally recommend Eaton Corporation plc (NYSE:ETN) as a “Buy,” making it an appealing investment in the industrial sector.

Ave Maria World Equity Fund stated the following regarding Eaton Corporation plc (NYSE:ETN)  in its first quarter 2024 investor letter:

“Eaton Corporation plc (NYSE:ETN) is an intelligent power management company. The company is a long-term beneficiary in the trend towards electrification, energy transition and digitalization. Eaton is also benefiting from unprecedented global stimuli such as the Inflation Reduction Act, Infrastructure Investment and Jobs Act, the Chips and Science Act and the EU recovery plan known as the NextGenerationEU.”