Eaton(US:ETN) 智通财经网·2026-01-06 08:13Core Viewpoint - UBS downgraded Eaton Corporation's rating from "Buy" to "Neutral," citing limited upside potential for earnings in the coming year despite the company's strong position in the AI and data center supply chain [1] Group 1: Earnings and Valuation - UBS analysts noted that Eaton's current stock price is in a premium valuation range, with capacity expansion pressuring profit margins and market expectations for 2026 earnings being overly optimistic [1] - The firm predicts that Eaton's initial earnings guidance for 2026 will be below market expectations, with the Americas Electrical segment's operating profit margin expected to be 29.5%, a decline of 20 basis points year-over-year, contrary to the market's anticipated mild improvement [1][2] - UBS estimates that Eaton's earnings per share for 2026 and 2027 will be 3% to 4% lower than market expectations, which could lead to negative revisions for a stock that relies on upward earnings revisions to support its valuation [2] Group 2: Market Position and Competitors - Despite benefiting from strong demand in data centers, UBS warned that the profitability from this business segment will fall short of investor expectations, with an organic growth rate of 11% projected for the Americas Electrical segment in 2026 [2] - UBS highlighted that investors are beginning to differentiate between industrial companies involved in AI based on the proportion of service business, with Eaton being less favored compared to peers with higher recurring service revenues, such as Vertiv, GE Vernova, and Trane Technologies [2] Group 3: Long-term Outlook - UBS emphasized that despite the downgrade, Eaton remains a quality company with the potential for high single-digit organic sales growth and double-digit earnings per share growth in the long term [3] - The target price for Eaton was lowered from $440 to $360, reflecting a 24x valuation based on 2027 earnings per share expectations, aligning with the average valuation level of the industrial sector [3] - UBS concluded that while Eaton's organic sales and earnings growth potential remain high, the downward pressure on earnings forecasts necessitates a reduction in its valuation multiple [3]