RBC Capital Highlights Eaton (ETN) Beat-and-Raise Potential Despite Conservative 2026 Guidance

Eaton Corporation (NYSE:ETN) is one of the under-the-radar AI stocks to buy. On February 4, RBC Capital raised the price target for Eaton to $407 from $399 with an Outperform rating. This adjustment was made as the firm noted that there was much to like regarding Eaton’s Q4 2025 earnings beat, despite management’s conservative guidance for 2026. RBC Capital added that the underlying momentum in orders and backlog suggests that Eaton’s 2026 guidance has significant beat-and-raise potential.

Morgan Stanley also raised the price target for Eaton Corporation (NYSE:ETN) to $425 from $405 with an Overweight rating on the same day. While skeptics have challenged the company’s narrative recently, demand remains strong as Q4 orders again exceeded expectations.

Although demand for its products is at an all-time high, the stock’s relative valuation dropped to multi-year lows, leading the firm to express increased confidence in the company’s ability to sustain high-single-digit organic growth over several years.

Eaton Corporation (NYSE:ETN) operates as a power management company in the US, Canada, Latin America, Europe, and the Asia Pacific. It operates through Electrical Americas, Electrical Global, Aerospace, Vehicle, and eMobility segments.

While we acknowledge the potential of ETN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.