Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Eaton Corp. plc, EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
EBITDA exhibited a consistent upward trend over the five-year period. Simultaneously, all related profitability metrics – Net Income, EBT, and EBIT – also demonstrated positive growth, suggesting a strengthening operational and financial performance. The rate of increase in EBITDA appears to be accelerating in the later years of the observed period.
- EBITDA Trend
- EBITDA increased from US$3,962 million in 2021 to US$6,179 million in 2025. This represents a cumulative growth of 55.9% over the five years. The year-over-year growth rates were: 1.2% (2022), 22.6% (2023), 14.5% (2024), and 10.0% (2025). The increasing growth rates suggest improving operational efficiency or increasing market demand.
- Relationship between EBITDA and other Profitability Metrics
- The growth in EBITDA consistently outpaced the growth in Net Income. This indicates that factors such as depreciation and amortization, interest expenses, and taxes had a proportionally smaller impact on overall profitability as EBITDA increased. This could be due to strategic capital management, favorable tax conditions, or efficient debt structuring.
- EBITDA’s growth closely mirrored that of EBIT, with a relatively stable difference between the two metrics across all years. This suggests that depreciation and amortization expenses remained consistent as a percentage of EBIT, indicating a predictable pattern of asset utilization and expense recognition.
- The difference between EBIT and EBT remained relatively stable, indicating consistent interest expense as a percentage of EBIT. This suggests a stable capital structure and consistent borrowing costs.
The observed trends suggest a positive trajectory in the company’s operational performance and profitability. The accelerating growth in EBITDA, coupled with consistent relationships between related profitability metrics, warrants further investigation into the underlying drivers of this performance.
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Enterprise Value to EBITDA Ratio, Current
Eaton Corp. plc, current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 154,249) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 6,179) |
| Valuation Ratio | |
| EV/EBITDA | 24.96 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Boeing Co. | 24.32 |
| Caterpillar Inc. | 25.45 |
| GE Aerospace | 25.96 |
| Honeywell International Inc. | 19.93 |
| Lockheed Martin Corp. | 18.10 |
| RTX Corp. | 19.59 |
| EV/EBITDA, Sector | |
| Capital Goods | 22.64 |
| EV/EBITDA, Industry | |
| Industrials | 17.93 |
Based on: 10-K (reporting date: 2025-12-31).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Eaton Corp. plc, historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 154,439) | 120,944) | 122,149) | 76,903) | 67,594) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 6,179) | 5,617) | 4,904) | 4,009) | 3,962) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 24.99 | 21.53 | 24.91 | 19.18 | 17.06 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Boeing Co. | 28.30 | — | 71.32 | — | — | |
| Caterpillar Inc. | 27.31 | 12.46 | 12.16 | 13.86 | 12.43 | |
| GE Aerospace | 26.67 | 22.88 | 11.06 | 14.82 | 95.57 | |
| Honeywell International Inc. | 21.57 | 15.87 | 15.55 | 18.01 | 15.57 | |
| Lockheed Martin Corp. | 18.43 | 14.23 | 11.71 | 14.98 | 11.97 | |
| RTX Corp. | 20.00 | 16.80 | 16.62 | 14.92 | 15.48 | |
| EV/EBITDA, Sector | ||||||
| Capital Goods | 23.85 | 21.78 | 16.03 | 19.01 | 19.87 | |
| EV/EBITDA, Industry | ||||||
| Industrials | 18.56 | 17.18 | 14.85 | 16.46 | 16.30 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
3 2025 Calculation
EV/EBITDA = EV ÷ EBITDA
= 154,439 ÷ 6,179 = 24.99
4 Click competitor name to see calculations.
The Enterprise Value to EBITDA ratio exhibits a generally increasing trend over the observed period, though with some fluctuation. Initial values indicate a ratio of 17.06 in 2021, rising to 19.18 in 2022. A more substantial increase is then noted, reaching 24.91 in 2023. The ratio decreased slightly in 2024 to 21.53 before increasing again to 24.99 in 2025, nearly matching the peak observed in 2023.
- Enterprise Value
- Enterprise Value demonstrates a consistent upward trajectory throughout the period. Starting at US$67,594 million in 2021, it increased to US$76,903 million in 2022, then experienced a significant jump to US$122,149 million in 2023. A slight decrease to US$120,944 million occurred in 2024, followed by further growth to US$154,439 million in 2025.
- EBITDA
- EBITDA also shows an overall increasing trend, though the rate of increase is less pronounced than that of Enterprise Value. From US$3,962 million in 2021, EBITDA rose to US$4,009 million in 2022 and continued to increase to US$4,904 million in 2023. Further growth was observed in 2024, reaching US$5,617 million, and again in 2025, reaching US$6,179 million.
- EV/EBITDA Ratio – Interpretation
- The increasing EV/EBITDA ratio suggests that the market valuation of the enterprise is growing at a faster rate than its earnings before interest, taxes, depreciation, and amortization. This could indicate increased investor optimism, a higher growth premium embedded in the valuation, or potentially, a relative overvaluation. The slight dip in the ratio in 2024 may suggest a temporary correction or a period of more balanced growth between enterprise value and EBITDA. The return to a similar level in 2025 as 2023 suggests the upward trend has resumed.
The consistent growth in both Enterprise Value and EBITDA contributes to the observed trend in the ratio. However, the disproportionate increase in Enterprise Value relative to EBITDA is the primary driver of the increasing EV/EBITDA ratio.
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