Eaton reported record quarterly sales of $8.5 billion in Q2, up 21% year over year, with organic growth of 14% and free cash flow up 22% to $874 million. Demand from data centers, grid modernization and power infrastructure is lifting its electrical equipment businesses, with Electrical Americas reaching record sales of $4 billion and rolling 12-month orders rising 41% organically. Aerospace sales grew 13% to $1.2 billion, and Eaton plans to separate its Mobility business in the first quarter of 2027. After raising its 2026 organic growth guidance to 11%–13% and adjusted EPS guidance to $13.40–$13.60, the stock, closing at $381.98 on Oct. 20, trades at 28.3 times expected 2026 adjusted earnings. The author says that is not cheap for an industrial company, but argues that double-digit growth and strong margins help explain why investors are willing to pay a premium.
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