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On Thursday, HSBC analysts have upgraded TE Connectivity (NYSE:TEL) stock from a Hold to a Buy rating, simultaneously raising the price target to $175 from the previous $166. The upgrade reflects a positive outlook on the company’s valuation and growth prospects. According to InvestingPro data, TE Connectivity, with a market capitalization of $40.43 billion, has received upward earnings revisions from 5 analysts for the upcoming period, supporting the bullish sentiment.
TE Connectivity, a global industrial technology leader generating $16.03 billion in revenue, has been observed trading at a 15.8x calendar year 2025 estimated (CY25e) non-GAAP price-to-earnings (PE) multiple and at a 13.6x calendar year 2026 estimated (CY26e) non-GAAP PE multiple. According to HSBC’s analysis, this presents a discount compared to the company’s historical average of a 17.6x consensus price/next 12-month earnings per share (EPS) multiple. InvestingPro’s Fair Value analysis suggests the stock is currently slightly undervalued, with additional insights available in the comprehensive Pro Research Report.
The firm’s analysts justify the upgrade by pointing out that the current discount to historical multiples is considered unwarranted, especially considering TE Connectivity’s accelerating growth. They maintained their target PE multiple at 20.0x, adjusting the next 12-month non-GAAP EPS forecast to $8.73, up from $8.32.
The new price target of $175 suggests a roughly 31% upside potential from the current share price. HSBC’s analysts believe that the company’s stock presents a valuable opportunity for investors, leading to the decision to raise both the rating and the price target.
In other recent news, TE Connectivity Ltd. reported fiscal second-quarter results that exceeded expectations, with adjusted earnings reaching $2.10 per share, surpassing the analyst consensus of $1.96. The company’s revenue increased by 4% year-over-year to $4.1 billion, topping estimates of $3.96 billion. TE Connectivity also issued optimistic guidance for the fiscal third quarter, forecasting adjusted earnings of approximately $2.06 per share on revenue of about $4.3 billion, both above Wall Street projections. The company’s Industrial segment saw a 17% growth in operating margin, driven by broad business growth and continued momentum in AI, aerospace, and energy applications. CEO Terrence Curtin highlighted the company’s strong operational performance, which led to record adjusted earnings per share. The positive results and guidance reflect TE Connectivity’s confidence in its ability to sustain growth. The company’s shares rose significantly in response to these developments.
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