Eaton’s Third Quarter Largely as Expected; We Maintain Fair Value Estimate

After reviewing narrow-moat-rated Eaton’s third-quarter results, we see no reason to change our $154 fair value estimate. Revenue increased 8% on a reported basis to $5.3 billion, or 15% on an organic basis, fairly balanced between price and volume. Except for aerospace, which we were disappointed by, all of Eaton’s five remaining operating segments saw double-digit increases in organic top-line growth. Sales came in line-ball accurate with our expectations, though vehicle outperformed and made up the shortfall from aerospace.