Eaton Corp. (NYSE: ETN) may not be as universally known in the industrial sector as many of the larger conglomerates, but the company’s $33 billion market cap and dominance in power management could prove more than just ripe for investors looking for upside. A fresh research report from Credit Suisse’s Julian Mitchell comes with potential upside that could go far above and beyond the most bullish views of other Wall Street firms.

Credit Suisse has an official rating as Outperform, and its $80 price target is already more than $2.00 above the consensus analyst target price, and it is $3.00 above the median analyst target. Credit Suisse’s new view signals that there are multiple ways to create value here for Eaton investors, with potential cash usage and a CEO change as likely catalysts.

The firm sees Eaton as being at a crossroads. With numerous options available, Mitchell said that the moves outlined in his report could add another $10 to $20 on top of his above-average $80 price target. As far as how this compares to other Wall Street analysts, the highest analyst price target is at $85.00, so $90 to $100 would be well above peers.

Credit Suisse’s report said:

At the end of this year, the company will be mostly through its debt pay-down and synergy realization associated with the Cooper acquisition, and therefore in a position to use its balance sheet for M&A and larger buybacks. We also should receive news on CEO succession, as Sandy Cutler steps down after 15 years in the role. Given its history of using its balance sheet, and moves enacted by other newly-appointed EE/MI CEOs, we think Eaton will be one of the most interesting stocks to watch over the next 12 months.

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It is Eaton’s numerous options available to management and chances of reversing the sluggish relative share price performance of recent years that could drive a re-rating here. Adding another $10 to $20 on top of the $80 target would be substantially above the consensus now. In fact, that could imply total upside of over 25%, to as much as about 40% if you include Eaton’s 3% dividend.

Other key drivers noted were as follows:

• Balance sheet offers higher chances of buybacks.
• Cost-cutting and other factors could more than offset potential near-term disappointment on organic sales growth.
• Acquisitions can continue and could drive considerable earnings growth and enhance long-term value.
• Divestments via spin-offs were shown to not be tax-free until the end of 2017, but the preparation time and forecasting could occur in early 2016.

Credit Suisse even pointed out that more drastic steps could come down the road. It is also called cheap at less than 14 times 2016 expected earnings, when it used to trade at a premium to peers. There is an opportunity to split Eaton into two or three separately listed companies, or an industry mega-merger could bring big opportunities. Also, Eaton’s low valuation looks attractive against peers, with a well above average dividend yield of about 3%.

Trading at $71.90, Eaton has a 52-week range is $57.11 to $79.98.

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