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Investing.com - BofA Securities has raised its price target on TE Connectivity (NYSE:TEL) to $190.00 from $168.00 while maintaining a Buy rating on the stock. The company, currently trading at $172.65 and sporting a market capitalization of $51.2 billion, is approaching its 52-week high of $175.03.
The firm expects TE Connectivity to report third-quarter fiscal revenue of $4.34 billion, above both Street estimates and the company’s guidance of $4.30 billion. BofA projects third-quarter earnings per share of $2.08, exceeding the Street estimate of $2.07 and guidance of $2.06. According to InvestingPro data, the company is set to report earnings on July 23, trading at a P/E ratio of 37.5x.
BofA analysts note that IHS estimates for the second calendar quarter tracked ahead of TE’s, which could lead to upside in numbers. The firm models neutral foreign exchange impact in the fiscal third quarter, which they believe is similar to foreign exchange assumptions in the company’s guidance.
BofA estimates organic growth of 6% year-over-year versus 9% year-over-year growth previously, as they include $118 million of merger and acquisition revenue ($70 million Richards, $34 million Harger, and $14 million Sense). Their revenue estimate of 5% quarter-over-quarter growth is slightly above typical seasonality of 2% quarter-over-quarter.
The firm reiterates its Buy rating as TE Connectivity continues to deliver solid overall growth and profitability despite a weaker auto production backdrop and difficult macroeconomic conditions. The stock has demonstrated strong momentum with a 21.8% year-to-date return, and InvestingPro analysis shows the company maintains a "GOOD" financial health score. Subscribers can access 13 additional ProTips and comprehensive financial metrics in the Pro Research Report.
In other recent news, TE Connectivity reported impressive fiscal second-quarter results, with adjusted earnings of $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, exceeding estimates of $3.96 billion. Looking ahead, TE Connectivity has provided optimistic guidance for the fiscal third quarter, projecting adjusted earnings of approximately $2.06 per share on revenue of about $4.3 billion, both above Wall Street expectations. Additionally, HSBC analysts have upgraded TE Connectivity’s stock rating from Hold to Buy, raising the price target to $175, reflecting a positive outlook on the company’s valuation and growth prospects. The analysts noted that the stock is trading at a discount compared to historical averages, which they consider unwarranted given the company’s growth. Furthermore, TE Connectivity announced the pricing of a $900 million senior notes offering through its subsidiary, Tyco Electronics Group S.A. The proceeds from this offering are intended for general corporate purposes, including debt repayment related to a recent acquisition.
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