Goldman Sachs analyst Mark Delaney maintained a Buy rating on TE Connectivity (TEL – Research Report) on January 24 and set a price target of $175.00.
Mark Delaney’s Buy rating for TE Connectivity (TEL) hinges on a robust financial performance and promising growth prospects. In his view, the company’s recent earnings report, which showed a slight underperformance in revenue but an earnings per share (EPS) above consensus estimates, indicates resilience. Despite the broader semiconductor industry facing headwinds from inventory reductions, TE’s connector division has not been as severely impacted due to shorter lead times. Delaney suggests that TE’s stable bookings and a backlog close to record levels could mean that revenue estimates may not need significant downward adjustments, and there might even be potential for EPS upside primarily driven by margin strength.
Further, Delaney points to TE’s impressive margin improvements, highlighted by a year-on-year increase in adjusted EBIT margin and guidance indicating continued strength. These margin improvements, driven by strategic pricing, portfolio optimization, and restructuring savings, have translated into strong free cash flow (FCF) conversion. He also underscores TE’s strategic positioning in areas of secular growth, such as electrification, artificial intelligence, and renewables, where the company enjoys increased product content. Specifically, TE has notably higher content in electric vehicles (EVs) compared to internal combustion engine vehicles and is well-placed with market leaders in the EV space, including in the crucial Chinese market. This positions TE for revenue growth in the long term, further justifying the Buy rating.
Delaney covers the Consumer Cyclical sector, focusing on stocks such as Tesla, Rivian Automotive, and Fisker. According to TipRanks, Delaney has an average return of 14.8% and a 59.46% success rate on recommended stocks.
In another report released on January 24, Bank of America Securities also reiterated a Buy rating on the stock with a $155.00 price target.
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TE Connectivity (TEL) Company Description:
Switzerland-based TE Connectivity Ltd. designs, manufactures and sells connectivity and sensor solutions. The company, which was founded in 2000, operates through the following segments: Transportation Solutions, Industrial Solutions, and Communications Solutions.
Read More on TEL:
- TE Connectivity price target raised to $153 from $148 at Truist
- TE Connectivity price target raised to $145 from $140 at Stifel
- TE Connectivity removed from ‘Tactical Outperform’ list at Evercore ISI
- TE Connectivity price target raised to $162 from $144 at Wells Fargo
- Te Connectivity Ltd Announces Upcoming Conference Webcast
