$ETN daily pick: sell Dec 18 $300 put (buy-side) after the midterm data-center washout
$ETN: I'm selling the Dec 18 $300 put on @EatonCorp after a beat-and-raise got washed out with the data-center complex.
Live at 12:15pm ET ($339.78):
14% under the 200-day
About 21x 2027 EPS estimates
$7.80 credit, breakeven $292.20
About 2.6% in 42 days (~23% annualized)
I think the selloff is overdone because Eaton just reported record sales of $8.9B (+28%) with organic growth of 19% and raised full-year adjusted EPS guidance to $13.70 to $13.80.
Not financial advice
What happened: on Nov 3 Eaton beat with adjusted EPS of $3.68 vs $3.54 estimated and raised organic growth guidance to 13% to 15%. Electrical backlog was up 46%. Then Nov 4 and Nov 5 took the stock down about 17% from the post-earnings close as AI and data-center names sold off after the midterms. No company-specific news on those down days.
Why a put and not the stock: implied volatility is about 54% after the washout so the premium is usable. The $300 strike sits under the 52-week low of $311.92 and 11.7% below the current price. If I get assigned I own Eaton at $292.20 net about 14% under today's price.
The risk: if data-center capex really stalls and the stock breaks the December 2025 low the put can lose money fast. A smaller version is the Dec 18 300/280 put spread for a $2.50 credit which caps the risk at $1,750.
What I'd watch: Electrical Americas and data-center order commentary into the Feb 2 report. The Dec 18 expiry comes before that report so earnings are not inside this trade. The $1.10 quarterly dividend works out to about 1.3% a year at this price.
Sources: Eaton official: record Q3 sales $8.9B (+28%), adj EPS $3.68, raises FY guide · Eaton Q3 2026 earnings PDF: sales $8.947B, adj EPS $3.68, electrical backlog +46% · Motley Fool: raised organic growth midpoint 14%, electrical backlog over $20B · Trefis: ETN -7.4% Nov 5 on no company news amid data-center selloff · Investing.com: adj EPS $3.68 vs $3.54, sales $8.9B vs $8.53B est · Yahoo/Zacks: revenue $8.95B (+28%), EPS $3.68 vs $3.54 consensus
Not financial advice. For informational and educational purposes only.
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