Eaton (ETN) is well-positioned for sustained data-center growth, undertaking dozens of capacity-expansion projects while "prudently managing the margin impact," RBC Capital Markets said Sunday in a report.

In Q2, Eaton's data-center sales jumped 65%, supported by a $15 billion backlog in its North American electrical segment, 85% growth in data-center orders and what RBC estimates is a 15-year industry construction backlog, the report said.

The company also pointed to growth tied to electrification, utility grid-strengthening investments, and reshoring as manufacturers add US capacity, the report said. RBC raised Eaton's 2026 adjusted earnings estimate to $13.45 a share from $13.25.

RBC increased its price target on Eaton stock to $512 from $484 and maintained its outperform rating.

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