Eaton's Growth Targets Look Achievable, Analyst Raises EPS Forecast For 2026 & 2027

BofA Securities analyst Andrew Obin reiterated a Buy rating on Eaton Corporation ETN with a price forecast of $410 following last week’s investor day.

The analyst writes that, at the event, the company issued 2024-2030 targets of organic growth of 6%-9% and adjusted EPS CAGR of over 12%, aligning with his expectations and investor forecasts.

Obin notes that while data centers contribute to organic growth (~19% of sales in 2025E; high-teens CAGR), growth is broad-based, with Commercial & Institutional (20% of sales), Utilities (11%), and Aerospace (15%) also expected to grow at high-single-digit rates.

Eaton expects 350-450bps margin expansion by 2030 (~28% segment margins), driven mainly by Electrical Global and Aerospace. The guidance appears reasonable with potential upside, per the analyst.

The analyst estimates organic growth to accelerate on the margin from 2025 in 2026/2027, and decelerate in the outer years of the company’s target.

The analyst witnessed investor pushback that the implied returns from Eaton’s >$1.5 billion in capacity additions are ‘too high.’

Meanwhile, Obin’s discussions with the company at the event suggest that the strong returns on incremental investments align with Eaton’s established framework.

The analyst raised estimates for 2026/2027 EPS to $13.43 (from $13.20) and $15.09 (from $14.35).

Price Action: ETN shares are up 2.00% at $299.49 at the last check Monday.

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