UPDATE: Deutsche Bank Initiates Eaton at Buy on Multiple Positive Factors

In a report published Monday, Deutsche Bank analyst John G. Inch initiated coverage on Eaton ETN with a Buy rating and $81.00 price target.

In the report, Deutsche Bank noted, “We are launching coverage of Eaton with a Buy rating and 12-month price target of $81. Our forecast estimates are $5.25 in 2014 and $6.20 in 2015 – above consensus. Our high-teens EPS forecast growth rates would be greater than comparative peer growth estimates – driven by merger synergies associated with the acquisition of Cooper. Last year, Eaton acquired Cooper – a highly complementary electrical products player – that provided a runway of substantial revenue and cost upside. Eaton generally appears to have been run more efficiently than Cooper. Meanwhile, revenue synergies appear highly likely, propelled by common customers and channel partners. Eaton should also be able to realize meaningful service revenue at Cooper where Cooper had little service in its mix compared with Eaton's ~20% of Electrical Systems and Services. Cash operating synergies (excluding sales synergies) could equate to over $1.00/share by 2016.”

Eaton closed on Friday at $65.62.