TE Connectivity (TEL) AI Stock Analysis

• Market Cap: $49.48B
• Dividend Yield: 1.7%
• Average Volume (3M): 1.60M
• Price to Earnings (P/E): 36.6
• Beta (1Y): 1.29
• Revenue Growth: 1.23%
• EPS Growth: -58.22%
• Country: US
• Employees: 85,000
• Sector: Technology
• Sector Strength: 86
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 2.10
• Shares Outstanding: 296,546,500
• 10 Day Avg. Volume: 1,736,880
• 30 Day Avg. Volume: 1,596,763
• PEG Ratio: 1.50
• Price to Book (P/B): 3.30
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.97
• Enterprise Value/Market Cap: 0.78
• Enterprise Value/Revenue: 0.61
• Enterprise Value/Gross Profit: 6.93
• Enterprise Value/Ebitda: 2.60
• 1Y Price Target: $165.14
• Price Target Upside: -1.04% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 78 Outperform
• Price Target: $188.00 ▲(12.66%Upside)

TE Connectivity's overall stock score of 78 reflects its strong financial performance and strategic growth initiatives. The company's robust earnings and industrial segment growth are significant positives, although high valuation and potential short-term price consolidation are considerations. The company is well-positioned for future growth, but investors should be cognizant of valuation levels and market conditions.

Positive Factors

AI and Technology

Improving AI exposure: The DDN subsegment saw 77% y-o-y reported (78% organic) revenue growth, driven by strength in AI applications.

Earnings

TEL reported revenue and EPS better than expected, with improvements in both Industrial and Transportation segments and lower FX impact.

Strategic Acquisitions

The acquisition of Richards Manufacturing expands TEL’s Industrial Solutions segment with a focus in utility grid and underground energy transmission.

Negative Factors

Auto Industry Challenges

TEL continues to deliver solid overall growth and profitability despite a weaker auto production backdrop and difficult macro.

Tariff Impact

Tariffs pose headwinds for TEL, but price increases are expected to offset the impact.

Transportation Segment Performance

Continued weak performance of the transportation segment: Segment revenue dipped 4% y-o-y.

TE Connectivity Business Overview & Revenue Model

Company Description

TE Connectivity Ltd., together with its subsidiaries, manufactures and sells connectivity and sensor solutions in Europe, the Middle East, Africa, the Asia Pacific, and the Americas. The company operates through three segments: Transportation Solutions, Industrial Solutions, and Communications Solutions. The Transportation Solutions segment provides terminals and connector systems and components, sensors, relays, antennas, heat shrink tubing, and application tooling products for use in the automotive, commercial transportation, and sensor markets. The Industrial Solutions segment offers terminals and connector systems and components; and heat shrink tubing, interventional medical components, relays, and wires and cables for aerospace, defense, oil and gas, industrial equipment, medical, and energy markets. The Communications Solutions segment supplies electronic components, such as terminals and connector systems and components, relays, heat shrink tubing, and antennas for the data and devices, and appliances markets. TE Connectivity Ltd. sells its products to approximately 140 countries primarily through direct sales to manufacturers, as well as through third-party distributors. The company was formerly known as Tyco Electronics Ltd. and changed its name to TE Connectivity Ltd. in March 2011. TE Connectivity Ltd. was incorporated in 2000 and is based in Schaffhausen, Switzerland.

How the Company Makes Money

TE Connectivity makes money primarily through the sale of its connectivity and sensor products. The company's revenue model is driven by manufacturing and distributing electronic components to a diverse range of industries, such as automotive, industrial, and communication sectors. Key revenue streams include the Automotive Solutions segment, which provides products for vehicle connectivity and sensor technologies; the Communications Solutions segment, focused on data and devices; and the Industrial Solutions segment, which serves a broad array of industrial applications. Additionally, TE Connectivity benefits from strategic partnerships and long-term contracts with major industry players, providing stability and growth in its earnings. The company's innovation in next-generation technologies and expansion into emerging markets also contribute significantly to its revenue.

TE Connectivity Financial Statement Overview

Summary

TE Connectivity exhibits a strong financial profile with consistent profitability, solid operational efficiency, and effective cash flow management. The company demonstrates a healthy balance sheet with low financial leverage and strong returns on equity. Although revenue growth is moderate, the company's profitability and cash flow generation remain robust.

Income Statement

TE Connectivity's income statement shows strong financial performance with positive growth in key areas. The Gross Profit Margin is robust at 34.9% for TTM, indicating effective cost management. The Net Profit Margin increased to 20.2% TTM, reflecting improved profitability. Revenue growth over the previous period is moderate at 1.14%, highlighting steady expansion. The EBIT and EBITDA margins also indicate solid operational efficiency at 18.5% and 21.0%, respectively. Overall, the company demonstrates a healthy revenue stream and profitability, although revenue growth could be stronger.

Balance Sheet

The balance sheet of TE Connectivity shows a stable financial position. The Debt-to-Equity Ratio is 0.46, which is relatively low, suggesting prudent financial leverage. The Return on Equity (ROE) is strong at 26.7% TTM, indicating efficient use of equity to generate profits. The Equity Ratio is 51.1%, demonstrating a balanced capital structure with adequate equity to asset coverage. The company maintains a healthy balance sheet, but a higher equity ratio could further enhance financial resilience.

Cash Flow

TE Connectivity's cash flow analysis highlights robust cash generation capabilities. The Free Cash Flow to Net Income Ratio is 0.86, reflecting strong free cash flow relative to net income. Operating Cash Flow to Net Income Ratio is 1.11, indicating efficient conversion of earnings into cash. The Free Cash Flow Growth Rate is slightly negative at -0.54%, suggesting a marginal decrease in free cash flow compared to the previous period. Overall, the company maintains excellent cash flow management, supporting its ongoing operations and potential investments.

Breakdown	TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	16.03B	15.85B	16.03B	16.28B	14.92B	12.17B
Gross Profit	5.60B	5.46B	5.05B	5.24B	4.89B	3.73B
EBITDA	3.78B	3.69B	3.14B	3.58B	3.48B	1.28B
Net Income	1.39B	3.19B	1.91B	2.43B	2.26B	-259.00M
Balance Sheet
Total Assets	23.66B	22.85B	21.71B	20.78B	21.46B	19.24B
Cash, Cash Equivalents and Short-Term Investments	2.55B	1.32B	1.66B	1.09B	1.20B	945.00M
Total Debt	5.61B	4.33B	4.21B	4.21B	4.09B	4.15B
Total Liabilities	11.44B	10.37B	10.06B	9.88B	10.71B	9.75B
Stockholders Equity	12.09B	12.36B	11.55B	10.80B	10.63B	9.38B
Cash Flow
Free Cash Flow	2.78B	2.80B	2.40B	1.70B	1.99B	1.43B
Operating Cash Flow	3.58B	3.48B	3.13B	2.47B	2.68B	1.99B
Investing Cash Flow	-1.08B	-950.00M	-768.00M	-878.00M	-1.04B	-865.00M
Financing Cash Flow	-1.11B	-2.87B	-1.79B	-1.68B	-1.39B	-1.10B

TE Connectivity Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 166.87
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TEL, the sentiment is Positive. The current price of 166.87 is above the 20-day moving average (MA) of 164.49, above the 50-day MA of 155.97, and above the 200-day MA of 148.27, indicating a bullish trend. The MACD of 2.87 indicates Positive momentum. The RSI at 60.83 is Neutral, neither overbought nor oversold. The STOCH value of 77.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TEL.

TE Connectivity Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GRMN	81 Outperform	$40.12B	27.45	19.04%	1.73%	18.08%	7.28%
TEL	78 Outperform	$49.48B	36.57	11.33%	1.70%	1.23%	-58.22%
APH	77 Outperform	$118.14B	47.33	27.53%	0.68%	30.70%	27.09%
TDY	76 Outperform	$23.88B	29.14	8.61%	―	2.98%	-5.64%
FTV	75 Outperform	$24.34B	31.44	7.70%	0.45%	0.85%	-10.01%
GLW	64 Neutral	$44.38B	99.16	4.14%	2.16%	9.77%	-26.50%
Sector *	63 Neutral	$33.22B	5.99	-11.76%	1.91%	5.50%	-19.96%

TE Connectivity Corporate Events

TE Connectivity Issues $900 Million in Senior Notes

On May 9, 2025, TE Connectivity‘s subsidiary, Tyco Electronics Group S.A. (TEGSA), issued $900 million in senior notes, with proceeds intended for general corporate purposes, including debt repayment related to the acquisition of Richards Manufacturing. This follows TE Connectivity’s decision to terminate a $1.5 billion 364-Day Senior Credit Facility, effective May 16, 2025, as part of its strategy to manage debt and reduce its commercial paper program capacity.

TE Connectivity Issues €500M Senior Notes for Growth

On May 6, 2025, Tyco Electronics Group S.A., a subsidiary of TE Connectivity, issued €500 million in 2.500% Senior Notes due 2028. The proceeds, approximately €496.3 million after deductions, will be used for general corporate purposes, including debt repayment related to the acquisition of Richards Manufacturing. This strategic financial move is expected to strengthen TE Connectivity’s market position and support its growth initiatives.

TE Connectivity Reports Strong Q2 2025 Financial Results

TE Connectivity reported strong financial results for the second quarter of fiscal year 2025, with net sales reaching $4.1 billion, a 4% increase year over year. The company achieved a record adjusted EPS of $2.10, reflecting a 13% rise, and completed the acquisition of Richards Manufacturing Co. to enhance growth in the North American utility market. The company’s operational performance was robust, with a 19.4% adjusted operating margin and a significant reduction in greenhouse gas emissions. Looking ahead, TE Connectivity anticipates continued sales and EPS growth in the third quarter, driven by strategic investments and a strong market position.

TE Connectivity Acquires Richards Manufacturing Co.

On April 1, 2025, TE Connectivity completed the acquisition of Richards Manufacturing Co., a leader in North American utility grid products. This strategic acquisition allows TE Connectivity to enhance its position in the energy sector by leveraging the grid replacement and upgrade cycle in the region, while ensuring business continuity through the retention of Richards’ management team.