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TE Connectivity plc (TEL), founded in 1941 and headquartered in Ballybrit, Ireland, engineers cutting-edge connectivity and sensor solutions across diverse industries. Operating through its Transportation, Industrial, and Communications segments, the company’s portfolio spans automotive, aerospace, data centers, and IoT.
From 5G innovations to medical technologies, TE integrates advanced tools like 3D printing and artificial intelligence (AI)-driven designs to meet evolving global demands. Its market cap currently stands at $45.2 billion.
TE Connectivity's stock journey tells a story of modest gains but missed potential. While TEL stock climbed 15.7% over the past 52 weeks and 7.6% on a YTD basis, it lagged behind the S&P 500 Index’s ($SPX) stellar 31.8% returns over the past year and 25.8% gains in 2024, reflecting challenges in keeping pace with the market's broader momentum.
Zooming in further, TEL has also underperformed the Technology Select Sector SPDR Fund’s (XLK) 25.6% returns over the past 52 weeks and 20.3% gains on a YTD basis.
TE Connectivity’s shares have managed to stay in the green, but it’s lagging behind the S&P 500. The company’s solid performance in electric vehicles and industrial automation, bolstered by its global footprint, provides stability.
However, fiscal Q4 earnings results on Oct. 30 revealed headwinds, including flat global auto production and expected declines in Western markets for 2025. The industrial sector, hit by weak factory and building automation demand in Europe, also dragged down performance. Commercial transportation remains in a slump, with recovery projected only by late 2025.
Currency fluctuations and tax pressures shaved off $0.39 from adjusted EPS. Meanwhile, its sensors business suffers from market weakness and ongoing portfolio optimizations. Still, TE Connectivity’s strategic focus on high-growth markets and innovation allows it to weather the storm, showing resilience amid persistent macro and industry challenges.
For the current fiscal year, ending in September 2025, analysts project TE Connectivity’s profit to surge 7.7% year over year to $8.14 per share. Moreover, the company's earnings surprise history is solid, as it beat or matched the consensus estimates in each of the last four quarters.
The overall consensus is a “Moderate Buy” among the 15 analysts covering TEL stock. That’s based on eight “Strong Buy” ratings and seven “Holds.”
The overall configuration is slightly more bullish than three months ago when it had seven “Strong Buy” ratings.
Last month, HSBC’s outlook on TEL stock turned cautious. The bank downgraded the stock from “Hold” to “Reduce,” trimming its price target to $137 from $156. The downgrade reflects challenges in TEL’s transportation and industrial segments, where revenue declines persisted in Q4. Automotive, sensors, and commercial transportation all posted annual drops, underscoring enduring demand weakness.
Meanwhile, industrial revenues faltered further, signaling prolonged destocking effects. However, HSBC noted a bright spot in TEL’s communications subsegment, driven by surging AI demand, with orders up 36.8% year over year. While growth here offers some optimism, HSBC’s revised revenue forecasts suggest TEL faces broader headwinds, dampening near-term performance prospects.
The mean price target of $167.80 for TEL stock implies an upside potential of 11%. The Street-high target price of $190 suggests the stock could rally as much as 25.7% from the current levels.
