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Wallingford, Connecticut-based Amphenol Corporation (APH) designs, manufactures, and markets electrical, electronic, and fiber optic connectors in the U.S., China, and internationally. With a market cap of $79 billion, Amphenol operates through Harsh Environment Solutions, Communications Solutions, and Interconnect and Sensor Systems segments.
The electronic components manufacturer has significantly outperformed the broader market over the past year. Over the past 52 weeks, APH rallied 53.2%, outpacing the S&P 500 Index’s ($SPX) 26.1% returns. In 2024, APH is up 32.8% compared to SPX’s 16.5% gains on a YTD basis.
Zooming in further, APH has also outperformed the S&P 500 Technology Sector SPDR’s (XLK) 33.1% returns over the past 52 weeks and 15% gains on a YTD basis.
Despite surpassing Wall Street’s expectations for both revenue and EPS, APH share prices plummeted by 6.4% following the release of its Q2 earnings on Jul. 24. The company reported an impressive 18.2% annual sales growth to $3.6 billion and a 14% increase in net income to $524.8 million. The decline in stock price can be attributed to a sector-wide sell-off on Jul. 24, which also saw the S&P 500 Technology Sector SPDR drop by 4.1%. Nevertheless, Amphenol demonstrated resilience, rebounding by 3.4% on Jul. 26.
For the current fiscal year, ending in December, analysts anticipate the company’s EPS to grow 17.3% annually to $1.76. The company’s earnings surprise history is solid, exceeding the consensus estimate in each of the last four quarters.
Among the 15 analysts covering the APH stock, the consensus rating is a “Strong Buy.” That’s based on 11 “Strong Buy” ratings and four “Holds.”
The configuration has been almost consistent over the past months.
On Aug. 2, TD Cowen reiterated its “Hold” rating on Amphenol, trimming the price target to $60. The adjustment reflects the company's aggressive AI investments, projected to hit $1.5 billion next year, and its rapid acquisitions. Despite challenges, Amphenol's decentralized structure supports its strategy, with spending aligned to cash flow. TD Cowen sees potential stabilization in valuation if Amphenol continues to deliver positive results in its AI segment.
APH’s mean price target of $73.93 represents a premium of 12.4% from current price levels. The Street-high target of $82 indicates a potential upside of 24.6%.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
