Eaton (ETN) Stock Forecast & Price Target

Eaton Corp's stock outlook is bolstered by a projected organic sales growth of 5.5% to 7.5% year-over-year, with expectations for continued growth momentum at approximately 7% in the first half of 2025 and an acceleration to around 9% in the second half, driven by increased capacity in European markets. The company is also set to experience significant margin expansion, with segment operating margins anticipated to rise by around 350 to 450 basis points in 2025, positively influencing its free cash flow potential. Furthermore, Eaton's datacenter business exhibited a remarkable 45% year-over-year growth in 2024, supported by a substantial increase in hyperscaler capital expenditure, which is expected to bolster further demand in the coming years.

Eaton Corporation has revised its outlook, indicating a decline in its Vehicle segment by 7% and further projecting declines in its Residential segment, which accounts for 6% of sales, contrasting earlier expectations. The eMobility segment also faced a decline of 10%, reflecting challenges in its growth projections. The company's optimistic expectations for data center opportunities may not materialize if order rates return to normal levels, suggesting potential revenue pressures ahead.