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Switzerland-based TE Connectivity Ltd. (TEL) engages in the design and manufacture of connectivity and sensor solutions. With a market cap of $43.9 billion, TE Connectivity operates through Transportation Solutions, Industrial Solutions, and Communications Solutions segments.
Companies worth $10 billion or more are generally described as "large-cap stocks," TE Connectivity fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the electronic components industry. It distributes its products to approximately 140 countries through direct sales to manufacturers and third-party distributors.
TE Connectivity stock has slipped 10.4% from its 52-week high of $159.98 achieved on Jul. 24. TEL stock has declined 4% over the three months compared to the Technology Select Sector SPDR Fund’s (XLK) 5.2% decline during the same time frame.
Over the longer term, TE Connectivity has underperformed XLK. TEL gained 10.2% over the past 52 weeks and 2.1% in 2024, lagging behind XLK’s 16.6% gains over the past year and 5.9% returns on a YTD basis.
However, TEL has been trading above its 200-day moving average since mid-November and above its 50-day moving average since early November with some fluctuations.
Shares of TE Connectivity surged 3.6% after the release of its Q3 earnings on Jul. 24. Despite a marginal annual dip in net sales to $4 billion, the company demonstrated robust operational efficiency. Its gross margin expanded by 6.7% year over year, reaching $1.4 billion. It managed to keep operating expenses low while boosting its R&D investment by 7.4% to $189 million. This led to an impressive 8.5% annual growth in net income, totaling $573 million.
However, TEL stock dropped 3.4% on Sept. 3 due to a broader sell-off in tech stocks. This followed the release of the ISM manufacturing index’s August figures, which fell below expectations, raising economic concerns.
TE Connectivity’s competitor, Celestica Inc. (CLS), has substantially outperformed TEL. CLS gained 75.4% over the past year and 40.1% in 2024.
Among the 15 analysts covering the TEL stock, the consensus rating is a “Moderate Buy.” The mean price target of $169 represents a potential upside of 17.9% from current price levels.
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.
