economy
We're raising our Eaton price target after sellers got the earnings all wrong
This power management provider has orders as far as the eye can see, driven largely by the AI data center boom.
TL;DR
- Eaton's Q1 revenue increased nearly 17% year-over-year to a record $7.45 billion, surpassing analyst estimates.
- Adjusted EPS rose over 3% to $2.81, also beating expectations.
- Backlog growth was significant: 44% in Electrical Americas, 73% in Electrical Global, and 28% in Aerospace.
- Eaton's total data center backlog has grown to 228GW, representing approximately 12 years of backlog at a 2025 build rate.
- The Boyd Thermal acquisition is performing strongly, with Q1 revenue over 100% increase and projected 2026 sales of $1.7 billion.
- The company is focused on its 'grid-to-chip' strategy, managing power from the utility grid to AI data centers and chips.
- Eaton raised its full-year organic growth outlook to 9%-11% and increased the midpoint of its adjusted EPS forecast.
- The Mobility segment is on track for spin-off by Q1 2027.
- Key end markets driving the full-year forecast include Data Centers & Distributed IT, Electric Vehicles, and Commercial Aerospace.