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With a market cap of $46.3 billion, TE Connectivity Ltd. (TEL) is a leading global connectivity and sensor solutions provider based in Schaffhausen, Switzerland. Operating across three segments - Transportation Solutions; Industrial Solutions; and Communications Solutions, it serves diverse markets including automotive, industrial, and telecommunications.
Companies valued at $10 billion or more are generally considered “large-cap” stocks and TE Connectivity fits this criterion perfectly. TE Connectivity's presence in approximately 140 countries and a workforce of 89,000 employees, including over 8,000 engineers, drives its substantial revenue.
However, the electronics maker recently retreated marginally from its 52-week high of $153.54, reached on June 24. Over the last three months, TE Connectivity's shares climbed 5.4%, which slightly lags behind the broader S&P 500 Technology Sector SPDR's (XLK) gain of around 6% during the same period.
In the longer term, TEL has increased 7.5%, trailing behind the XLK’s 15.6% gains. Moreover, shares of TE Connectivity have gained 13.5% over the past 52 weeks, compared to XLK’s 31.9% gains over the same time frame.
Nevertheless, TEL stock has consistently traded above its 200-day moving average since November last year and has remained above its 50-day moving average during this period despite some fluctuations, indicating a bullish price trend.
TEL has been underperforming primarily due to challenges in certain segments, such as the decline in industrial equipment sales, weakness in sensor applications, and broader market weakness affecting its communications solutions segment. Yet, the stock recovered marginally after its Q2 earnings results on Apr. 24, driven by better-than-expected profit fueled by strong demand for its sensor technology from electric vehicle (EV) makers worldwide and a solid performance in its Transportation Solutions segment.
Also, TEL has outpaced its rival Jabil Inc. (JBL), which saw a 9.7% increase over the past 52 weeks but a decline of 11.3% on a YTD basis.
Despite the stock’s underperformance relative to the broader sector, analysts are cautiously optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 12 analysts covering the stock, and the mean price target of $163 is a premium of just 7.9% to current levels.
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.
