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Eaton Corporation plc (Eaton Corporation or “the company”) is a provider of power management solutions. The company serves customers in electrical, hydraulic and mechanical power markets. It primarily operates in North America, Europe, Asia and Latin America. Eaton is headquartered in Dublin, Ireland 



In our opinion, Eaton's moat is dug from high customer switching costs and advantageous relationships with distributors that would be difficult to replicate.  Eaton flight instrumentation and hydraulic systems for aircraft create sticky relationships with sticky aircraft manufacturers. Eaton makes key products that distributors traditionally must have in their catalogs. The addition of Cooper Industries strengthens this advantage.



Management looks for organic revenue growth to be between 3% and 4%, but faces negative headwinds from foreign exchange rates of roughly 4%. Electrical Products group should post good results, thanks to strong demand in the Americas.  Strength in the aftermarket business should help support solid gains at the Aerospace group. Softness at the Hydraulics division, may offset these gains. The stock also offers a good dividend yield, and should appeal to risk-averse investors.



  • Diversified product portfolio reduces business risks and increases opportunities

  • Robust manufacturing capabilities and diverse geographic presence reduces business risks

  • Strong financial results supports long-term growth 


  • Legal proceedings could have a negative impact on the cost structure and profitability 


  • Competition across all business segments could adversely affect margins

  • Volatile prices of raw materials could have a negative impact on the profitability 


  • Positive outlook for the global electrical components and equipment market could help enhance business growth

  • Growing global automotive drivetrain market could provide opportunity to expand revenues and profits 

The above report is for information purposes only, and is not a solicitation or offer to buy or sell any securities. Past performance is no guarantee of future performance. Neither diversification nor asset allocation ensures a profit or guarantees against loss. Before investing, investors should consider their risk tolerance, investment objectives, time horizon, available capital, and charges and expenses.  


The information presented in this report has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guranteed. All material is subject to change without notice. The views and opinions expressed are those of Focused Stock Research and/or WALT ST Investment Management, Ltd. and in no way reflect the views and opinions of Investment Consultants nor their Broker Dealers.


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