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TE Connectivity Ltd. (TEL), headquartered in Switzerland, specializes in designing and manufacturing connectivity and sensor solutions. The company, with a market capitalization of $45.3 billion, operates across three primary segments: Transportation Solutions, Industrial Solutions, and Communications Solutions.
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. TEL stands out in the market due to its strong expertise in connectivity and sensor solutions, serving diverse industries such as automotive, industrial, and communications.
The company benefits from its broad portfolio of advanced technologies and global manufacturing footprint, enabling it to meet complex customer demands and maintain cost efficiency. TE Connectivity’s focus on innovation positions it well in high-growth areas like electric vehicles, industrial automation, and 5G infrastructure.
TE Connectivity shares have dipped 6.1% from its 52-week high of $159.98, which they hit on Jul. 24. TEL stares have climbed 4.3% over the three months compared to the S&P 500 Index’s ($SPX) 9.8% returns over the same time frame.
Over the longer term, TE Connectivity has underperformed $SPX. TEL has gained 12.7% over the past 52 weeks and 6.9% in 2024, lagging behind SPX’s 31.1% gains over the past year and 26.5% returns on a YTD basis.
Confirming a bearish trend, TEL has been trading below its 200-day moving average since late July and under its 50-day moving average since early the past year.
TE Connectivity's underperformance in the broader market can be attributed to flat global auto production, expected declines in Western markets for 2025, and weak factory and building automation demand in Europe. Additionally, commercial transportation remains in a slump, with recovery not expected until late 2025. Currency fluctuations, tax pressures, and a struggling sensors business, which faces market weakness and ongoing portfolio optimizations, have further weighed on performance.
TEL released its Q4 earnings on Oct. 30, and its shares plunged 2.9% in the following trading session. It reported adjusted earnings of $1.95 per share, meeting Wall Street expectations. Revenue for the period was $4.07 billion, exceeding the forecast of $4.01 billion. Looking ahead, TE Connectivity projects an EPS of $1.88 for the first quarter, with revenue expected to be around $3.9 billion.
TE Connectivity’s competitor, Celestica Inc. (CLS), has substantially outperformed TEL as well as the S&P 500 index. CLS gained 223.7% over the past year and 200.6% in 2024.
Among the 15 analysts covering the TEL stock, the consensus rating is a “Moderate Buy.” The mean price target of $167.80 represents a potential upside of 11.7% from current price levels.
