Eaton Corp. Upgraded To Buy

Goldman Sachs has upgraded Eaton Corporation ETN from Neutral to Buy and has added the company to Goldman's Conviction List. In the report, Goldman Sachs writes "We raise our 2011/2012 EPS to $7.80/$9.40 from $7.35/$8.90 and our 12-month price target to $117 (15X 2011E EPS from 14X) from $103 for 24% upside. Despite strong 2010 performance, we believe estimate revisions will remain strong and drive further momentum, with GS now 12%/16% above consensus and likely still too low. With above-average late-cycle and emerging-markets exposure, a balance sheet that will move into a more offensive posture in 2012 and more cyclical businesses (Truck, Hydraulics) still below mid-cycle levels, we believe valuation can expand as well and is the basis for our higher target." Goldman Sachs has also issued a $117 price target. Eaton Corporation closed yesterday at $94.11.