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On Monday, TD Cowen reaffirmed its positive stance on TE Connectivity (NYSE:TEL), maintaining a Buy rating and a price target of $165.00. The company, with a market capitalization of $45 billion and a current stock price of $150.15, has demonstrated strong financial health according to InvestingPro analysis. The firm’s analyst, Joseph Giordano, highlighted TE Connectivity’s resilience and growth potential, despite challenges in the automotive and industrial sectors. With a P/E ratio of 23.85 and annual revenue of $15.85 billion, the company maintains a solid market position. Giordano pointed out that the company’s earnings per share (EPS) grew at a double-digit rate in fiscal year 2024 and are expected to continue at this pace through fiscal year 2026, with analysts forecasting EPS of $8.06 for FY2025. This growth is attributed in part to TE Connectivity’s datacenter business, which has been pacing growth and is considered an overlooked but significant factor in the company’s performance.
Giordano noted that while TE Connectivity has not modeled a real cyclical acceleration, such an event would act as a major catalyst for the company’s growth. He also emphasized the company’s ability to grow in the tough automotive sector, despite overall production declines. This growth demonstrates the secular nature of TE Connectivity’s exposure to the market.
TE Connectivity’s performance in fiscal year 2024 and the anticipation of continued growth through fiscal year 2026, as outlined by Giordano, reflect the company’s strategic positioning and adaptability. The analyst’s comments suggest that TE Connectivity is well-prepared for potential industry upcycles while already performing well independently of such trends.
Giordano’s reiteration of the Buy rating and $165.00 price target on TE Connectivity underscores the firm’s confidence in the company’s future performance and market positioning. With TE Connectivity’s diverse business interests and its ability to navigate headwinds in key sectors, the company appears poised for sustained growth in the coming years. InvestingPro analysis suggests the stock is currently fairly valued, with 12 additional exclusive insights available to subscribers. For a comprehensive understanding of TE Connectivity’s market position and future potential, investors can access the detailed Pro Research Report, part of the extensive analysis available for over 1,400 US stocks on InvestingPro.
In other recent news, TE Connectivity has announced an agreement to acquire Richards Manufacturing Co. for $2.3 billion, a move expected to enhance its U.S. energy end-market offerings. S&P Global has maintained TE Connectivity’s ’A-’ credit rating despite the acquisition, citing the company’s strong financial position and low leverage. The acquisition is anticipated to slightly improve EBITDA margins, with leverage projected to decrease by fiscal 2026 due to EBITDA growth and robust free cash flow. Meanwhile, UBS has raised the price target for TE Connectivity to $188, acknowledging the company’s fiscal second quarter 2025 earnings per share of $1.95, which exceeded consensus expectations. Baird analysts also increased their target to $168, noting stabilization in industrial equipment and growth in AI and non-AI cloud applications. In contrast, Truist Securities reduced its price target to $163, citing foreign exchange impacts and a drag from the automotive sector. Despite these adjustments, Truist maintained a Hold rating, reflecting a balanced view of the company’s performance. These developments highlight TE Connectivity’s strategic moves and analyst perspectives amid evolving market conditions.
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