Thursday, May 3, 2018

Eaton Not Getting Much Love At All

This has been a rough quarter for the multi-industrial sector. Companies like 3M (MMM), Illinois Tool Works (ITW), Parker-Hannifin (PH), and Rockwell (ROK) have their stocks take a hit despite earnings reports that haven’t been all that bad. High valuations and expectations have certainly played a role in this cycle, but I believe investors are also getting more evidence that significant end-markets like autos, electronics, some commercial vehicles, and parts of the “general industrial” category are noticeably slowing.

I do have some of those concerns about Eaton (ETN), and I would expect fading momentum in segments like Vehicle and Hydraulics as the year goes on. On the other hand, Eaton’s exposure to aerospace, commercial buildings, and sub-sectors like data centers and harsh/hazardous environments should offer better results. All told, expectations seem very low for Eaton and this might be a name to consider if you’re still looking for some industrial exposure at this later point in the cycle.

Read more here:
Eaton Not Getting Much Love At All

No comments: