Stock of the Day

October 20, 2020

Amphenol (APH)

$67.58
-$1.80 (-2.6%)
Market Cap: $84.01B

About Amphenol

Amphenol Corporation, together with its subsidiaries, primarily designs, manufactures, and markets electrical, electronic, and fiber optic connectors in the United States, China, and internationally. It operates through three segments: Harsh Environment Solutions, Communications Solutions, and Interconnect and Sensor Systems. The company offers connectors and connector systems, including harsh environment data, power, high-speed, fiber optic, and radio frequency interconnect products; busbars and power distribution systems; and other connectors. It also provides value-add products, such as backplane interconnect systems, cable assemblies and harnesses, and cable management products; other products comprising flexible and rigid printed circuit boards, hinges, other mechanical, and production related products. In addition, the company offers consumer device, network infrastructure, and other antennas; coaxial, power, and specialty cables; and sensors and sensor-based products. It sells its products through its sales force, independent representatives, and a network of electronics distributors to original equipment manufacturers, electronic manufacturing services companies, original design manufacturers, and service providers in the automotive, broadband communication, commercial aerospace, industrial, information technology and data communication, military, mobile device, and mobile network markets. Amphenol Corporation was founded in 1932 and is headquartered in Wallingford, Connecticut.

Amphenol Bull Case

Here are some ways that investors could benefit from investing in Amphenol Co.:

  • Amphenol Co. recently reported a quarterly earnings per share (EPS) of $0.55, exceeding analysts' expectations of $0.50, indicating strong financial performance and effective management.
  • The company achieved a revenue of $4.32 billion for the quarter, significantly higher than the consensus estimate of $4.05 billion, showcasing robust demand for its products.
  • With a current stock price around $80.68, analysts have a consensus rating of "Moderate Buy," suggesting positive sentiment and potential for price appreciation.
  • Amphenol Co. has a solid net margin of 15.92% and a return on equity (ROE) of 25.67%, reflecting efficient operations and strong profitability, which are attractive to investors.
  • The company has a manageable debt-to-equity ratio of 0.66, indicating a balanced approach to leveraging, which can provide stability during economic fluctuations.

Amphenol Bear Case

Investors should be bearish about investing in Amphenol Co. for these reasons:

  • Despite recent growth, Amphenol Co. posted a decline in EPS from $0.82 in the same quarter last year, which may raise concerns about future earnings sustainability.
  • The company has a relatively low dividend yield of 0.96%, which may not be attractive for income-focused investors looking for higher returns from dividends.
  • Analysts have mixed ratings, with five holding a "hold" rating, suggesting uncertainty about the stock's short-term performance.
  • Amphenol Co. operates in a competitive market for electrical and electronic connectors, which could pressure margins and growth if competitors gain market share.
  • The recent increase in target prices by analysts may indicate that the stock is approaching its valuation ceiling, potentially limiting upside for new investors.

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