TE Connectivity (TEL) Poised for Growth: A Strong Buy Recommendation Amidst Rising Orders and Strategic Market Positioning

Goldman Sachs analyst Mark Delaney has maintained their bullish stance on TEL stock, giving a Buy rating on April 16.

Mark Delaney has given his Buy rating due to a combination of factors that suggest TE Connectivity (TEL) is poised for solid growth in the upcoming fiscal year. Despite third-quarter guidance from TEL that falls slightly short of market expectations, Delaney’s optimism is fueled by a few key indicators. These include an increase in orders with a book-to-bill (BTB) ratio exceeding 1.0, signaling strong future revenue potential, and a historically large backlog, estimated at around $6 billion, which should support continuous operations and revenue flow.
Moreover, TEL is strategically positioned to capitalize on growing markets with its involvement in plug-in hybrid and battery electric vehicles (PHEVs/BEVs), and artificial intelligence (AI)—areas that are expected to see significant revenue growth. TEL anticipates doubling its AI-related revenue in FY25 to roughly $400 million, with the potential to reach approximately $1 billion in the years following. Additionally, improved industrial cyclical conditions anticipated in 2025, combined with TEL’s margin expansion and efficient capital deployment towards share buybacks—supported by a nearly 100% free cash flow conversion—further solidify Delaney’s positive outlook on the stock.

According to TipRanks, Delaney is a 5-star analyst with an average return of 17.5% and a 60.73% success rate. Delaney covers the Consumer Cyclical sector, focusing on stocks such as Tesla, Rivian Automotive, and ChargePoint Holdings.

In another report released on April 16, Robert W. Baird also maintained a Buy rating on the stock with a $159.00 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.