Eaton Corporation plc (ETN) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Eaton Corporation plc

Updated on October 25, 2026 · accounts published on July 31, 2026

A growing industrial with record-level margins

Eaton trades at a P/E of 37.6× over the last 12 months, 46 % above its sector median and 37 % above its own ten-year median of 27.5×.

• Is Eaton expensive or cheap? Eaton's P/E of 37.6× is 46 % above its sector median, and the stock has traded cheaper 70 % of the time over the last decade.
• How is the business doing? Fiscal 2025 operating margin reached 19 %, well above the 15 % average of 2014-2025, with revenue up 10 % over the last 12 months.
• How strong is the balance sheet? Net debt is 1.8× fiscal 2025 EBITDA, under the 3× healthy ceiling for industrials, and the dividend has risen for 11 straight years.
• What to expect from the next earnings? Eaton reports on November 3, 2026; analysts expect EPS of $3.54, and it has beaten estimates in each of the last 8 quarters.
• Does Eaton turn its margin into cash, and what multiple of the cycle does it trade at? Free cash flow equalled 87 % of net income in fiscal 2025, just above the 85 % healthy bar for industrials.

Is Eaton expensive or cheap?

Over the last 12 months, Eaton trades at a P/E of 37.6×. That compares with a ten-year median of 27.5× and a median of 25.8× across 297 companies in its sector. The stock carries a 37 % premium to its own history and has traded at a lower multiple 70 % of the time over the decade. EV/EBITDA gives the same reading: 25.3× against a seven-year average of 20.0×. Free cash flow yields 2.8 % and the earnings yield is 2.5 %, which leaves little margin for error. The share price is 20 % below its 52-week high, but the multiple is still well above both benchmarks.

How is the business doing?

Eaton is growing at a steady pace. Revenue and EPS both rose 10 % over the last 12 months, and revenue per share compounded at 10 % a year between fiscal 2020 and 2025. Margins are the strongest part of the record. The operating margin reached 19 % in fiscal 2025, against a 15 % average for 2014-2025, and stands at 18 % over the last 12 months, with a 13 % net margin. Returns on capital are less convincing. ROIC of 9.1 % is only 0.3 points above the sector median of 8.8 %, and it cleared 10 % in just 3 of the last 10 fiscal years.

How strong is the balance sheet?

Eaton carries real debt, but it is well covered. At the end of fiscal 2025, net debt of $27.38 per share was equal to 7.4 % of the current share price and 1.8× EBITDA, comfortably below the 3× an industrial can carry safely. Debt to equity is 1.05 and the current ratio 1.24 over the last 12 months. An Altman Z of 4.9 sits well inside the safe zone. The dividend yields 1.2 % over the last 12 months. It has grown for 11 consecutive fiscal years and paid out 40 % of fiscal 2025 earnings, so it still has room to grow.

What to expect from the next earnings?

Expectations have barely moved. Over the last 30 days, the 2026 EPS consensus from 16 analysts went from $13.55 to $13.60, and revenue estimates were almost unchanged. Eaton has beaten EPS estimates in each of the last 8 quarters. The latest beat came on July 31, 2026, when it reported $3.15 against $3.07 expected, a 2.6 % surprise. For the report on November 3, 2026, analysts expect $3.54. Of the 40 analysts covering the company, 28 rate it a buy, 12 a hold and none a sell. At a P/E of 37.6×, the market already prices in that run of beats.

Does Eaton turn its margin into cash, and what multiple of the cycle does it trade at?

Industrials are semi-cyclical, so analysts look at the operating margin, cash conversion and multiples set against the cycle, not at one year's profit. A margin that never turns into cash, or a multiple taken at a peak, can mislead. Eaton passes the operating tests: a 19 % fiscal 2025 margin against a 12 % healthy threshold, and free cash flow of 87 % of net income, barely above 85 %. Capex of 3.3 % of revenue was below the sector's 4 %-8 % range. On the cycle, the P/E of 37.6× is above 110 % of its 28.1× ten-year average, which is the line for expensive.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.