ETN to Divest Mobility Business in RMT Transactions with Dana

研报英文原文证据摘录

ETN to Divest Mobility Business in RMT Transactions with Dana

ojected to generate ~$3.3bn

in sales for 2026 with an adjusted EBITDA of ~$614mn based on the transaction multiples provided

(~19% EBITDA Margin). While the implied margin is well below the core Electrical and Aerospace

EBITDA margins in the mid/high-20's, it is performing ahead of our expectations through 1H26. We

forecast the Mobility Group to generate ~$3.3bn in sales in 2027 and ~$500mn in EBIT. This will

be offset by debt reduction of $1.1bn which should equate to ~$40mn in lower interest expense.

The net impact is expected to be ~$0.75-$0.80/shr in EPS dilution. However, we expect proforma

ETN sales growth to improve by ~1% and EBIT margin expansion of ~100bps. Higher growth and

margin expansion should warrant multiple upside in our view.

Understanding the Business. The Mobility Group consists of ETN's existing Vehicle business

which is 65% commercial vehicle (i.e. truck) related and 35% tied to passenger and light duty

applications. ETN does have a 50/50 JV with Cummins related to the manufacturing and

sale of Automated Manual Transmission for medium and heavy-duty commercial vehicles. The

eMobility business focuses on electrical vehicle technologies. Essentially combining the company's

traditional expertise in Electrical with their legacy Vehicle business to create innovative solutions

for the EV market. Stephen Volkmann, CFA * | Equity Analyst

(212) 284-2031 | svolkmann@jefferies.com

Adjusting the Portfolio for Growth. The portfolio optimization action is not new to ETN. In 2020 and Chirag Patel * | Equity Associate

2021 the company divested their Lighting and Hydraulics operations (respectively). Both operations, (212) 284-1773 | cpatel@jefferies.com