TEL TE Connectivity plc - Fundamental Analysis
BULLISH
TEL Stock | Fundamental Analysis & Investment Insights
NYSE
•
Technology
•
Electronic Components
Current Price
$237.33
Analyst Target
$269.94
+13.7% Upside
52W High
$250.67
52W Low
$116.3
AI Analysis
Powered by advanced machine learning algorithms
Confidence Score
92%
Analysis Accuracy
TE Connectivity (TEL) exhibits strong fundamental momentum with robust double-digit revenue and earnings growth, consistent earnings beat rates, and improving margins, all while trading below its analyst target price. Despite a premium valuation relative to historical norms, TEL's metrics appear justified within the context of a high-growth technology sector where peers trade at even loftier multiples. The company maintains solid financial health with a conservative debt profile and durable profitability, positioning it well for continued outperformance. However, recent insider selling—particularly by the CEO and CFO—raises a cautionary note, though it does not override the broader positive trajectory supported by strong institutional sentiment and accelerating earnings.
Key Strengths
Exceptional YoY earnings growth of 145.3%, reflecting strong operating leverage and demand tailwinds across industrial and automotive end markets
Consistent earnings outperformance: 22 out of 25 quarters beat estimates, with an average surprise of 7.64% over the last four quarters
Superior profitability with operating margin of 19.77% and ROE of 14.62%, both above sector-adjusted benchmarks when considering capital intensity
Healthy balance sheet with a Debt/Equity ratio of 0.50, well below the sector average of 0.79, providing strategic flexibility
Attractive dividend profile with a sustainable 44.16% payout ratio and a 1.20% yield, rare for a growth-oriented tech component player
Key Risks
Premium valuation: Forward P/E of 26.4x is high relative to historical averages, leaving limited margin for error if growth decelerates
Recent insider selling totaling $94.95M, including significant transactions by the CEO and CFO, signals potential lack of confidence at the top
Limited free cash flow and cash/debt transparency (data unavailable), creating opacity around capital allocation capacity and liquidity resilience
Valuation compression risk if broader tech multiples contract, given TEL’s current P/E of 38.47 is sensitive to sentiment shifts
Exposure to cyclical end markets (industrial, automotive) could pressure growth during macroeconomic downturns despite current strength
AI Fair Value Estimate
Based on comprehensive analysis
$269.94
+13.7% above current price
Performance Snowflake
Multi-dimensional AI analysis across 5 key categories
Stock Price & Analyst Targets
Real-time price movements and analyst price targets
Historical Performance Trends
Long-term financial metrics and growth patterns
Valuation Metrics
Key valuation ratios and pricing indicators
Profitability, Growth & Financial Health
Detailed profit margins, ROE, debt ratios, and liquidity metrics
Sector Comparison & Peer Analysis
Compare TEL against industry averages and similar companies
Insider Trading & Analyst Ratings
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