We're Ringing the Register on a Holding That's Gone Parabolic
After adjusting our price target higher, we’re also downgrading the shares after their big run-up.
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| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
ETN | Sell | 48 | 395 | 545 | 4.0 |
After you receive this Alert, we will sell 48 shares of Eaton (ETN) at or near $395. Following the trade, ETN shares will account for roughly 4.0% of the Pro Portfolio
We are taking advantage of what can only be called a parabolic move higher in ETN shares, one that has pushed the position size to ~4.5% of the Portfolio assets and, as you can see below, landed them in an overbought condition.
The catalysts for ETN's more-than-25% move off its early January lows are the upsized capital spending levels by hyperscalers and public electric utilities. Earlier this week, we flagged the $103 billion multi-year spending plan at Duke Energy (DUK) , and today American Electric Power (AEP) said that it sees an additional $5 billion-$8 billion in transmission and generation projects on top of its current $72 billion five-year capital plan. That likely references continued demands on AEP’s footprint from its large load customer base.
AEP shared that it has signed agreements for an additional 28 gigawatts (GW) of load since last October, bringing the incremental demand to 56 GW of new load by 2030. That buildout keeps us long-term bullish on Eaton’s prospects and the shares.
Next week brings quarterly results from Dominion Energy (D) and other public electric utilities. As we aggregate those spending figures, we’ll revisit our ETN price target, but for now, we have enough reason to lift it to $430 from $405. Based on the current overbought condition and upside to that target, we will downgrade ETN shares to a Two rating.
(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)
At the time of publication, TheStreet Pro Portfolio was long ETN.
