EnerSys Outpaces Eaton in Value Metrics—Here's What the Numbers Show

For investors scouting the manufacturing and electronics sector, EnerSys (ENS) and Eaton (ETN) frequently appear on comparison lists. But when you dig into the valuation fundamentals, one company emerges as the more attractive prospect. The analysis hinges on two key frameworks: earnings momentum (Zacks Rank) and underlying asset valuation (Style Scores).

Earnings Momentum Favors ENS

The starting point for any value hunt is understanding analyst sentiment. EnerSys scores a Zacks Rank of #2 (Buy)—signaling that earnings estimate revisions have been trending positively. Eaton holds a #3 (Hold) ranking, indicating a more neutral posture from the analyst community. This gap matters because positive revisions typically precede price appreciation. ENS’s improving estimate trajectory suggests the market hasn’t fully priced in the company’s earnings potential.

Valuation Metrics Tell the Clearer Story

When you stack the two companies against standard valuation benchmarks, the disparity becomes striking.

Price-to-Earnings Assessment: ENS trades at a forward P/E of 14.70, whereas ETN commands a forward P/E of 28.98. This 2x difference indicates ETN investors are paying significantly more for each dollar of forward earnings—a red flag for value-conscious allocators.

Growth-Adjusted Valuation: The PEG ratio refines the P/E picture by factoring in expected earnings growth. ENS’s PEG stands at 0.98, suggesting the stock is actually trading below its growth rate—a classically bullish signal. ETN’s PEG of 2.53 implies a premium to its growth trajectory, leaving limited margin of safety.

Book Value Comparison: Using price-to-book ratios to measure market versus accounting value, ENS displays a P/B of 3.03. Eaton’s P/B of 7.21 indicates the market is bidding up its balance sheet value by more than double—another advantage for ENS from a fundamental standpoint.

Composite Scoring Reinforces the Verdict

The Value grade aggregates these and additional metrics into a single score. ENS earns a B, while ETN receives a D. Combined with ENS’s superior Zacks Rank, the evidence points toward EnerSys as the more compelling value proposition for disciplined investors seeking exposure to the manufacturing-electronics space.