Credit Suisse Starts Coverage on Eaton Corp with an "Outperform" Rating (ETN)

Credit Suisse Starts Coverage on Eaton Corp with an “Outperform” Rating (ETN)


Early on Monday, analysts at Credit Suisse initiated coverage on electrical and hydraulic parts maker Eaton Corp. (ETN) with a bullish rating following the deal to acquire Cooper Industries (CBE).

The analysts give ETN an “Outperform” rating with a price target of $72. This target suggests a 21% upside to Friday’s closing price of $59.75.

Credit Suisse commented, “We see an attractive combination of high exposure to end-markets that have sharp ‘snap-back’ potential or are near cyclical lows, and scope for substantial revenue growth arising from the CBE deal. The self-help potential in terms of margin expansion (CBE synergies, restructuring in the Industrial segment), de-leveraging, and portfolio change, should support the valuation multiple; we estimate medium-term EPS power of $7-8.”

Eaton Corp. shares were up 50 cents, or +0.84%, during pre-market trading on Monday.

The Bottom Line
Shares of Eaton Corp. (ETN) have a dividend yield of 2.54% based on Friday’s closing price of $59.75 and the company’s annualized dividend payout of $1.52 per share.

Eaton Corp. (ETN) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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