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: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The financial data indicates a consistent upward trend across all key profitability metrics from 2020 through 2024. Each year demonstrates growth, reflecting improving operational efficiency and profitability.
- Net income attributable to Eaton ordinary shareholders
- There is a strong and steady increase from $1,410 million in 2020 to $3,794 million in 2024. This more than doubling of net income over five years indicates robust bottom-line growth, suggesting effective cost management and/or revenue growth driving higher profits available to shareholders.
- Earnings before tax (EBT)
- EBT shows a similar pattern, rising from $1,746 million in 2020 to $4,566 million in 2024. The year-over-year increments are substantial, implying increasing profitability before tax obligations. The consistency between EBT and net income growth underscores stable tax rates or effective tax planning.
- Earnings before interest and tax (EBIT)
- EBIT increases steadily from $1,895 million in 2020 to $4,696 million in 2024. The EBIT growth aligns closely with EBT progression, highlighting enhanced operational earnings and suggesting that financing costs have a relatively stable or modest impact on earnings.
- Earnings before interest, tax, depreciation and amortization (EBITDA)
- EBITDA shows a pronounced upward trend from $2,706 million in 2020 to $5,617 million in 2024. This metric, serving as a proxy for operational cash flow, points to improved core business profitability and effective cost control on non-cash charges such as depreciation and amortization.
Overall, the trends across these four financial measures reveal a consistent and substantial improvement in profitability and operational efficiency. The progression suggests effective management strategies in place to drive earnings growth at multiple levels, resulting in enhanced shareholder value over the assessed period.
Enterprise Value to EBITDA Ratio, Current
Eaton Corp. plc, current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 159,726) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 5,617) |
| Valuation Ratio | |
| EV/EBITDA | 28.44 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Boeing Co. | — |
| Caterpillar Inc. | 14.56 |
| GE Aerospace | 29.78 |
| Honeywell International Inc. | 16.81 |
| Lockheed Martin Corp. | 13.14 |
| RTX Corp. | 19.78 |
| EV/EBITDA, Sector | |
| Capital Goods | 25.72 |
| EV/EBITDA, Industry | |
| Industrials | 18.88 |
Based on: 10-K (reporting date: 2024-12-31).
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, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 120,944) | 122,149) | 76,903) | 67,594) | 59,819) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 5,617) | 4,904) | 4,009) | 3,962) | 2,706) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 21.53 | 24.91 | 19.18 | 17.06 | 22.11 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Boeing Co. | — | 71.32 | — | — | — | |
| Caterpillar Inc. | 12.46 | 12.16 | 13.86 | 12.43 | 19.87 | |
| GE Aerospace | 22.88 | 11.06 | 14.82 | 95.57 | 9.35 | |
| Honeywell International Inc. | 15.87 | 15.55 | 18.01 | 15.57 | 20.21 | |
| Lockheed Martin Corp. | 14.23 | 11.71 | 14.98 | 11.97 | 9.97 | |
| RTX Corp. | 16.80 | 16.62 | 14.92 | 15.48 | 41.71 | |
| EV/EBITDA, Sector | ||||||
| Capital Goods | 21.78 | 16.03 | 19.01 | 19.87 | 25.02 | |
| EV/EBITDA, Industry | ||||||
| Industrials | 17.18 | 14.82 | 16.44 | 16.30 | 30.80 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/EBITDA = EV ÷ EBITDA
= 120,944 ÷ 5,617 = 21.53
4 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year period ending December 31, 2024. Enterprise value (EV) experienced consistent growth from 59,819 million US dollars in 2020 to a peak of 122,149 million US dollars in 2023, followed by a slight decrease to 120,944 million US dollars in 2024.
Earnings before interest, tax, depreciation, and amortization (EBITDA) demonstrated a steady upward trajectory, increasing from 2,706 million US dollars in 2020 to 5,617 million US dollars in 2024. This represents more than a doubling in EBITDA over the period, indicating improved operating profitability.
The EV/EBITDA ratio fluctuated during this timeframe. Starting at 22.11 in 2020, it decreased to 17.06 in 2021, suggesting a more favorable valuation relative to earnings in that year. The ratio then increased to 19.18 in 2022, rose sharply to 24.91 in 2023, and decreased to 21.53 in 2024. These variations indicate changing market perceptions of valuation relative to earnings, with the peak ratio in 2023 potentially reflecting higher market expectations or valuation pressures.
- Enterprise Value (EV):
- Consistent growth with a notable jump in 2023 and a slight decline in 2024.
- EBITDA:
- Steady increase across all years, indicating enhanced profitability and operational performance.
- EV/EBITDA Ratio:
- Initial decline followed by volatile increases, peaking in 2023, and decreasing in 2024, suggesting fluctuating valuation multiples relative to earnings.
Overall, the data suggests an improving operational performance supported by rising EBITDA, while enterprise value growth indicates increasing market capitalization over the period. The volatility in the EV/EBITDA ratio reflects changing market valuation sentiments, with a particularly high valuation multiple observed in 2023 before moderating somewhat in 2024.