Eaton Corp - Momentum
02 Maggio 2011 - 2:00AM
Zacks
Eaton Corp (ETN) recently jumped back to its multi-year high
after reporting strong Q1 results that included a 5% earnings
surprise. With four consecutive earnings surprises and a bullish
growth projection, this Zacks #1 rank stock clears the momentum
bar.
Company Description
Eaton Corp produces a range of industrial goods
including electric and hydraulic components and systems. The
company was founded in 1916 and has a market cap of $18.7
billion.
Eaton has been trending higher for most of the last
two years in the global economic rebound on strong demand and
booming sales. That showed up on April 20 when the company reported
strong Q1 results that came in ahead of expectations.
First-Quarter Results
Revenue for the period was up 23% from last year to
$3.8 billion. Earnings also looked good, coming in at 84 cents, 5%
ahead of the Zacks Consensus Estimate, where the company has an
average earnings surprise of 10% over the last four quarters.
The gains were driven by the company's Hydraulics
Segment, which saw sales increase 40% to $685 million. Its largest
segment, Electrical Americas was up 20% to $964 million.
Financial Profile
The company also continues to strengthen its
balance sheet, with cash and short-term investments up $208 million
to $697 million. Total debt is mostly unchanged from last year at
$3.45 billion.
Estimates
Estimates inched higher on the good quarter,
building on the trend of the last few months that has added 24
cents to the current year, currently pegged at $3.90. The next-year
estimate is bullish, projecting 18% earnings growth.
Valuation
But in spite of the gains, ETN still has value,
trading with PEG ratio of .77, safely below the traditional
benchmark for value of 1.
2-Year Chart
On the chart, shares jumped back to the recent high
on the good quarter. Look for support from the long-term trend on
any weakness, take a look below.
Michael Vodicka is the Momentum Stock Strategist
for Zacks.com. He is also the Editor in charge of the Zacks
Momentum Trader Service.
EATON CORP (ETN): Free Stock Analysis Report
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