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Based in Schaffhausen, Switzerland, TE Connectivity Ltd. (TEL) manufactures and sells connectivity and sensor solutions for a range of industries. Valued at $45.8 billion by market cap, the company operates through three segments: Transportation Solutions, Industrial Solutions, and Communications Solutions.
Shares of this electronics maker have underperformed the broader market over the past 52 weeks. TEL has gained 15.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 26.1%. In 2024, shares of TEL gained 6.4%, compared to SPX’s 16.5% return on a YTD basis.
Zooming in further, TEL has also lagged behind the S&P Technology Dividend Aristocrats ETF’s (TDV) 16.6% gain over the past 52 weeks and 7.6% returns on a YTD basis.
TEL has underperformed primarily due to challenges in specific segments, such as declining industrial equipment sales and weaker demand from regional markets like Europe and North America. Yet, the stock rose 3.6% on Jul. 24 following its Q3 earnings results, driven by better-than-expected profit and a positive outlook. This was fueled by a focus on key growth areas, including AI applications and the automotive industry, leading to growth in its Transportation and Communications segment, coupled with plans for future strategic mergers and acquisitions.
For the current fiscal year, ending in September, analysts expect TEL’s EPS to grow 12.3% year over year to $7.57. The company’s earnings surprise history is promising. It beat the consensus estimates in each of the last four quarters.
Among the 14 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on seven “Strong Buy” ratings and seven “Holds.”
This configuration is slightly more bullish than three months ago, with six “Strong Buy” ratings on the stock.
On Jul. 24, Evercore ISI maintained an “Outperform” rating on TEL and raised the price target to $180, citing confidence in the company's margin improvement and cost reduction initiatives.
The mean price target of $169 represents a premium of 13.1% to TEL’s current levels. The street-high price target of $190 implies a potential upside of 27.1% from the current price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
