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ETN

Eaton Corporation plc – Other Commercial and Service Industry Machinery Manufacturing
Eaton's mission is to improve the quality of life and the environment through the use of power management technologies and services. The Company provides sustainable solutions that help our customers effectively manage electrical, hydraulic, and mechanical power - more safely, more efficiently, and more reliably. Eaton's 2020 revenues were $17.9 billion, and it sells products to customers in more than 175 countries. The Company has approximately 92,000 employees.
Analysis Results
Intrinsic Value $84.16
Latest Price $133.36
Relative Value 58% overvalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of -1.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.6%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -1.9%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 2.28 2.12
2023 2.24 1.93
2024 2.19 1.76
2025 2.15 1.6
2026 2.11 1.46
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 38.3 billion. This corresponds to a present value of 24.6 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 8.87 billion. Adding in the terminal value gives a total present value of 33.5 billion.

There are presently 398.0 million outstanding shares, so the intrinsic value per share is 84.16.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 7,511,000,000
Current Cash 568,000,000
Current Liabilities 7,212,000,000
Current Debt 1,748,000,000
Non-Cash Working Capital (NCWC) 1,479,000,000
Change in NCWC -1,764,000,000
EBIT 2,463,000,000
Tax Provision 750,000,000
Depreciation and Amortization 922,000,000
Capital Expenditure -575,000,000
Unlevered Free Cash Flow 408,137,430
Current Assets 9,178,000,000
Current Cash 1,102,000,000
Current Liabilities 5,881,000,000
Current Debt 1,048,000,000
Non-Cash Working Capital (NCWC) 3,243,000,000
Change in NCWC -265,000,000
EBIT 1,824,000,000
Tax Provision 331,000,000
Depreciation and Amortization 811,000,000
Capital Expenditure -389,000,000
Unlevered Free Cash Flow 1,635,213,058
Current Assets 8,728,000,000
Current Cash 591,000,000
Current Liabilities 5,132,000,000
Current Debt 503,000,000
Non-Cash Working Capital (NCWC) 3,508,000,000
Change in NCWC 759,000,000
EBIT 2,863,000,000
Tax Provision 378,000,000
Depreciation and Amortization 884,000,000
Capital Expenditure -587,000,000
Unlevered Free Cash Flow 3,501,318,023
Current Assets 7,590,000,000
Current Cash 440,000,000
Current Liabilities 5,154,000,000
Current Debt 753,000,000
Non-Cash Working Capital (NCWC) 2,749,000,000
Change in NCWC -2,000,000
EBIT 2,966,000,000
Tax Provision 278,000,000
Depreciation and Amortization 903,000,000
Capital Expenditure -565,000,000
Unlevered Free Cash Flow 2,961,839,933
Current Assets 8,337,000,000
Current Cash 1,095,000,000
Current Liabilities 5,075,000,000
Current Debt 584,000,000
Non-Cash Working Capital (NCWC) 2,751,000,000
Change in NCWC 475,000,000
EBIT 2,499,000,000
Tax Provision 382,000,000
Depreciation and Amortization 914,000,000
Capital Expenditure -520,000,000
Unlevered Free Cash Flow 3,084,562,351
Current Assets 6,941,000,000
Current Cash 746,000,000
Current Liabilities 5,485,000,000
Current Debt 1,566,000,000
Non-Cash Working Capital (NCWC) 2,276,000,000
Change in NCWC 62,000,000
EBIT 2,253,000,000
Tax Provision 202,000,000
Depreciation and Amortization 929,000,000
Capital Expenditure -497,000,000
Unlevered Free Cash Flow 2,533,033,850
Current Assets 6,616,000,000
Current Cash 445,000,000
Current Liabilities 4,625,000,000
Current Debt 668,000,000
Non-Cash Working Capital (NCWC) 2,214,000,000
Change in NCWC -515,000,000
EBIT 2,342,000,000
Tax Provision 164,000,000
Depreciation and Amortization 925,000,000
Capital Expenditure -506,000,000
Unlevered Free Cash Flow 2,066,937,995
Current Assets 8,100,000,000
Current Cash 1,026,000,000
Current Liabilities 5,355,000,000
Current Debt 1,010,000,000
Non-Cash Working Capital (NCWC) 2,729,000,000
Change in NCWC 41,000,000
EBIT 2,449,000,000
Tax Provision -42,000,000
Depreciation and Amortization 983,000,000
Capital Expenditure -632,000,000
Unlevered Free Cash Flow 2,841,000,000
Current Assets 8,731,000,000
Current Cash 1,709,000,000
Current Liabilities 4,914,000,000
Current Debt 580,000,000
Non-Cash Working Capital (NCWC) 2,688,000,000
Change in NCWC 308,000,000
EBIT 2,147,000,000
Tax Provision 11,000,000
Depreciation and Amortization 997,000,000
Capital Expenditure -614,000,000
Unlevered Free Cash Flow 2,825,464,437
Current Assets 7,844,000,000
Current Cash 1,104,000,000
Current Liabilities 5,431,000,000
Current Debt 1,071,000,000
Non-Cash Working Capital (NCWC) 2,380,000,000
Change in NCWC 868,000,000
EBIT 1,530,000,000
Tax Provision 31,000,000
Depreciation and Amortization 598,000,000
Capital Expenditure -593,000,000
Unlevered Free Cash Flow 2,365,086,330

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