- Eaton (ETN +2.3%) is higher after Goldman Sachs upgrades shares to Buy from Neutral with an $88 price target, citing ETN management's indicating solid organic growth across most of the company's portfolio.
- Goldman views ETN's margins as potentially conservative and believes the company can drive most of its targeted margin improvement through self-help.
- Capital deployment could provide upside, the firm says, with ETN's net leverage at less than 2x and more than $5B of free cash flow estimated for 2018 and 2019.
- Goldman also models $800M in buybacks each year in 2018-19, consistent with prior years, but it thinks ETN could put an additional $2.2B to work without adding leverage.