Eaton (ETN) Stock Forecast & Price Target

Eaton Corp is projected to experience organic sales growth of approximately 5.5% to 7.5% year-over-year, with anticipated growth reaching around 7% in the first half of 2025 and 9% in the second half, fueled by increased capacity and a recovery in European markets. The company has also raised its organic revenue compound annual growth rate (CAGR) forecast to 6-9%, along with an expected improvement in segment operating margins, rising by 350-450 basis points from 2024. Notably, Eaton's datacenter business demonstrated outstanding performance, achieving organic growth of 45% year-over-year in 2024, bolstered by a significant 75% growth from hyperscalers, while strong demand in the US is expected to drive continued investment in infrastructure.

Eaton Corp is projected to experience declines across key segments, with the commercial vehicles division expected to decline by 7% and residential sales potentially also facing a downturn, which contrasts sharply with previous forecasts. Additionally, the eMobility sector is anticipated to decrease by 10%, driven in part by external factors such as Hurricane Helene and labor strikes in the aerospace industry, compounding concerns over potential revenue headwinds. The company's elevated expectations for its datacenter segment raise red flags, suggesting that a normalization of order rates could lead to disappointing results and further impact financial performance.