Eaton Corporation plc (NYSE:ETN) shareholders are probably feeling a little disappointed, since its shares fell 2.1% to US$312 in the week after its latest first-quarter results. Eaton reported US$5.9b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$2.04 beat expectations, being 5.4% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Taking into account the latest results, the most recent consensus for Eaton from 19 analysts is for revenues of US$25.1b in 2024. If met, it would imply a reasonable 6.2% increase on its revenue over the past 12 months. Per-share earnings are expected to step up 11% to US$9.41. Before this earnings report, the analysts had been forecasting revenues of US$25.0b and earnings per share (EPS) of US$9.01 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$319, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Eaton at US$375 per share, while the most bearish prices it at US$220. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Eaton's rate of growth is expected to accelerate meaningfully, with the forecast 8.3% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.9% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 7.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Eaton is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Eaton following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$319, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Eaton analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Eaton that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.