伊顿：伯恩斯坦第42届年度战略决策会议最佳理念演示幻灯片

Chad Dillard+1 917 344 8469chad.dillard@bernsteinsg.com Miguel Marques, CFA+1 917 344 8432miguel.marques@bernsteinsg.com Specialist Sales Steve Song+1 917 344 8401steve.song@bernsteinsg.com Price Target Eaton: Best Idea Presentation Slides from Bernstein's 42ndAnnual Strategic Decisions Conference Last week at Bernstein’s 42ndannual Strategic Decisions Conference, we pitched Eaton as ourbest idea. Enclosed are the presentation slides. The punchline: ETN is a triple threat, there’s~30% potential upside over the NTM, and out to 2030, it’s a double. Close Date2 Jun 2026ETN Close Price (USD)417.62Price Target (USD)534.00Upside/(Downside)28%52-Week Range435.43/311.90SPX7,609.78FYEDecDiv Yield1.1%Market Cap (USD) (M)162,162EV (USD) (M)183,288 There are 3 legs to our thesis, Eaton is a:1)Cyclical recovery story. Excluding secularend markets, the non-resi sector has been in recession since ‘23 and at its core, ETN is anon resi stock (1/3 of sales are tied to it). Money supply is expanding and we’re entering theera of fiscal dominance (tax reform/bonus depreciation to drive non-resi spend) and thisshould benefit ETN. Also, Electrical America’s EBIT margins are poised to accelerate, goingfrom 26% in 1Q26, to ~32% by 4Q26E, driven by pricing and better capacity absorption.This sets up a strong exit rate into ‘27 where street is only modeling 30% margins.2)Structural winner of the electrical infrastructure build-out.The procurement processis becoming more complex as electricity demand accelerates, power density increases andprojects get bigger. This is pushing customers to buy more turn-key systems and fewer singleproducts, which increases ETN’s wallet share and win rate.3) Under-appreciated portfoliotransformation story. In the last year, ETN spent $12B on acquisitions mainly focused onbuilding out its data center product suite and it’s spinning-off its mobility business in 1Q27.These change increase exposure to more attractive end markets (electrical, secular, datacenter), reduce cyclicality and are growth/margin accretive (click here for deep dive). The market underestimates the EPS algo and re-rate potential of the “new” ETN.Preportfolio changes, mgmt guided to 12% 2025-30 EPS CAGR, but we think an 18% CAGR(+10% organic + 5% from portfolio changes, +3% buybacks) is more realistic. For electricalinfrastructure stocks, every 1% in revenue CAGR yields 3x of P/E and we’re 150bps ahead ofthe street, which means ETN RemianCo should trade at 31x, not 26x. Flow this into our SOTPframework and we see ~30% upside over the NTM, but out to 2030, ETN may double. Investment Implications We maintain our Outperform rating and Price Target of $534 DETAILSU.S. ELECTRICAL EQUIPMENT ETN is a triple threat, there’s ~30% potential upside over the NTM, and out to 2030, it’s a double. Source: Bernstein analysis Source: Company data, Bernstein analysis EXHIBIT 8:ETN portfolio transformationU.S. ELECTRICAL EQUIPMENT Source: Bernstein analysis We would like to thank Federico Anchieri for his hard work and significant contribution to this report. APPENDIX - FINANCIAL FORECASTS EXHIBIT 14:ETN Segment Summary BERNSTEIN TICKER TABLE I. REQUIRED DISCLOSURES References to "Bernstein" or the “Firm” in these disclosures relate to the following entities: Bernstein Institutional Services LLC(April 1, 2024 onwards), Sanford C. Bernstein & Co., LLC (pre April 1, 2024), Bernstein Autonomous LLP, BSG France S.A. (April 1,2024 onwards), Sanford C. Bernstein (Hong Kong) Limited盛博香港有限公司,Sanford C. Bernstein (Canada) Limited, SanfordC. Bernstein (India) Private Limited (SEBI registration no. INH000006378), Sanford C. Bernstein (Singapore) Private Limited,Sanford C. Bernstein Japan KK(サンフォード・C・バーンスタイン株式会社)and analysts employed by Société GénéraleAfrica Technologies & Services to produce Bernstein research under a Global Services Agreement in place between Bernsteinand Société Générale. Bernstein is part of a joint venture between Société Générale (SG) and AllianceBernstein, L.P. (AB). Unless specifically notedotherwise, for purposes of these disclosures, references to Bernstein’s “affiliates” relate to both SG and AB and their respectiveaffiliates. VALUATION METHODOLOGY Eaton Corp PLC We arrive at our $534 price target by applying a 27x P/E multiple on our 2030 EPS estimate. Discounting this back, we arriveat our target price which implies a 33x P/E on our 2027 EPS. We believe this is appropriate given the long-term secular factorsfavoring the strength and long-term resilience of ETN’s earnings algorithm. RISKS Eaton Corp PLC Downside risks include: 1) lower than expected load growth impacting ETN’s Electrical organic growth business, 2) interruptionsto the ongoing global data center build, 3) slower than expected utility capex growth, 4) slower than expected reshoring trends,and 5) slower than expected growth/cancellations in mega projects. RATINGS DEFINITIONS, BENCHMARKS AND DISTRIBUTION EQUITY RATINGS DEFINITIONS Bernstein b