Using the industry peer median P/E multiple (trailing + forward), Eaton Corporation plc (ETN) has a fair value of $320.58 based on 10 comparable companies in the Industrial - Machinery industry.
USD in millions except Fair Price. Subject company highlighted.
| Mkt Cap ($M) | Trailing P/E | Forward P/E | |
|---|---|---|---|
| Eaton Corporation plcETN | 140,290 | 34.4x | 26.9x |
| Deere & CompanyDE | 157,162 | 31.5x | 23.3x |
| The Boeing CompanyBA | 153,421 | 78.8x | 149.1x |
| Lockheed Martin CorporationLMT | 145,078 | 29.2x | 20.9x |
| Honeywell International Inc.HON | 143,911 | 28.3x | 22.5x |
| Union Pacific CorporationUNP | 141,613 | 19.9x | 19.1x |
| Parker-Hannifin CorporationPH | 114,446 | 33.4x | 33.9x |
| Howmet Aerospace Inc.HWM | 93,360 | 62.5x | 50.4x |
| Illinois Tool Works Inc.ITW | 75,379 | 24.9x | 25.0x |
| Cummins Inc.CMI | 73,414 | 25.9x | 25.9x |
| Emerson Electric Co.EMR | 71,660 | 31.5x | 21.2x |
| Industry Median | 30.3x | 24.2x | |
| (*) Profit after tax | 4,089 | 5,206 | |
| Equity Value | 123,950 | 125,780 | |
| (/) Outstanding shares | 390 | 390 | |
| Fair Price | $318 | $323 | |
This P/E relative valuation uses the industry peer median Price-to-Earnings ratio to estimate fair value. Both trailing (last 12 months) and forward (next fiscal year analyst estimates) P/E multiples are computed independently.
The industry median trailing P/E is applied to the company's TTM net income, and the forward P/E to analyst-estimated net income. Each produces an equity value divided by shares outstanding to yield a fair price per share. The selected fair value is the average of the trailing and forward legs.