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Investing.com - BofA Securities raised its price target on TE Connectivity (NYSE:TEL) to $220.00 from $190.00 on Wednesday, while maintaining a Buy rating on the stock. The stock, currently trading at $199.67, has shown impressive momentum with a 27.31% gain year-to-date, though InvestingPro data indicates it may be trading above its Fair Value.
The firm cited TE Connectivity’s strong artificial intelligence revenue growth, with the company ramping up programs at multiple hyperscalers. BofA expects TEL’s AI revenue to exceed $800 million in fiscal year 2025, up from approximately $300 million in fiscal 2024.
BofA projects TE Connectivity will generate more than $1 billion in AI revenue in fiscal 2026, representing continued growth in this segment.
In the automotive sector, TE Connectivity continues to drive content growth through connectivity and electrification despite weaker global production, according to the research note.
BofA also highlighted that industrial revenues and margins are turning around for TE Connectivity, which should provide a tailwind in fiscal 2026, with the firm expecting "solid double digit EPS growth" for the company.
In other recent news, TE Connectivity reported impressive financial results for the June quarter, with revenue reaching $4.53 billion and earnings per share at $2.27. These figures surpassed analyst projections of $4.32 billion in revenue and $2.08 in earnings per share. The company experienced a 13.9% year-over-year sales increase, with organic growth of 9%, largely attributed to strong performance in its Transportation and Industrial segments. Additionally, TE Connectivity’s third-quarter results also exceeded expectations, driven by significant growth in the Industrial segment. In light of these developments, Evercore ISI has adjusted its price target for TE Connectivity, raising it from $195 to $200 while maintaining an Outperform rating. These recent developments underscore the company’s robust growth trajectory and its ability to surpass market predictions.
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