Morgan Stanley Sees Multiple Potential Catalysts Ahead For Eaton Corp PLC

In a report published Monday, Morgan Stanley analyst Nigel Coe reiterated an Overweight rating and $90.00 price target on Eaton Corp PLC (NYSE: ETN).

In the report, Morgan Stanley noted, “Recent quarters have disappointed given headwinds in Truck and Hydraulics markets. However our inventory and capex cycle work sees scope for core revenue outperformance in 2014/15 from ETN's end markets. We see upside to the $325m cost synergy target. While the $565m revenue synergy goal is less visible, there should be some low hanging fruit given complementary end markets. P/E is the right valuation metric for ETN given its sustainably lower tax rate. The stock is currently trading at a steep discount to peers and an end market rebound can strengthen the case for a re-rating.”

Eaton Corp PLC closed on Friday at $77.82.