Will Q2 Results Move Eaton's Stock Up?
Eaton delivered impressive Q1 2025 results, with revenue increasing 7.3% to $6.38 billion and a 9% organic growth rate, driven by strength in the Electrical and Aerospace segments. Adjusted EPS climbed 13% to a record $2.72, while segment margins reached 23.9%. The company has elevated its full-year guidance, anticipating 7.5–9.5% organic growth and adjusted EPS of $11.80–12.20. The company currently has a market capitalization of $151 billion. Over the past twelve months, revenue has been $25 billion, and it has been operationally profitable with $4.8 billion in operating profits and net income of $3.9 billion. While the outcome will largely depend on how results measure up against consensus and expectations, recognizing historical trends may tilt the odds in your favor if you are trading on events.
For event-driven traders, historical patterns can provide a competitive advantage, whether by positioning before earnings or reacting to movements post-release. If you are looking for upside with lower volatility than individual stocks, the Trefis High Quality portfolio serves as an alternative, having outperformed the S&P 500 and achieved returns exceeding 91% since its inception.
View the earnings reaction history of all stocks.
Here are some insights on one-day (1D) post-earnings returns:
Further data for the observed 5-Day (5D) and 21-Day (21D) returns following earnings is presented along with the statistics in the table below.
Correlation Among 1D, 5D, and 21D Historical Returns
A somewhat less risky strategy (though ineffective if the correlation is low) is to comprehend the correlation between short-term and medium-term returns following earnings, identify a pair that shows the highest correlation, and execute the suitable trade. For instance, if 1D and 5D display the strongest correlation, a trader might position themselves 'long' for the next 5 days if the 1D post-earnings return is positive. Below is some correlation data based on a 5-year and a 3-year (more recent) history. Note that the correlation 1D_5D indicates the relationship between 1D post-earnings returns and the subsequent 5D returns.
Discover more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (a combination of all three: the S&P 500, S&P mid-cap, and Russell 2000), yielding robust returns for investors.
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