Stock of the Day

May 4, 2021

TE Connectivity (TEL)

$154.55
-$1.23 (-0.8%)
Market Cap: $46.48B

About TE Connectivity

TE Connectivity Ltd., together with its subsidiaries, manufactures and sells connectivity and sensor solutions in Europe, the Middle East, Africa, the AsiaPacific, and the Americas. The company operates through three segments: Transportation Solutions, Industrial Solutions, and Communications Solutions. The Transportation Solutions segment provides terminals and connector systems and components, sensors, relays, antennas, and application tooling products for use in the automotive, commercial transportation, and sensor markets. The Industrial Solutions segment offers terminals and connector systems and components; and interventional medical components, relays, heat shrink tubing, and wires and cables for industrial equipment, aerospace, defense, marine, medical, and energy markets. The Communications Solutions segment supplies electronic components, such as terminals and connector systems and components, relays, heat shrink tubing, and antennas for the data and devices, and appliances markets. The company sells its products to approximately 140 countries primarily through direct sales to manufacturers, as well as through third-party distributors. The company was formerly known as Tyco Electronics Ltd. and changed its name to TE Connectivity Ltd. in March 2011. TE Connectivity Ltd. was founded in 1941 and is based in Schaffhausen, Switzerland.

TE Connectivity Bull Case

Here are some ways that investors could benefit from investing in TE Connectivity Ltd.:

  • TE Connectivity Ltd. has a strong market capitalization of $45.61 billion, indicating a robust financial position and stability in the market.
  • The company recently announced a stock repurchase program allowing for the buyback of $2.50 billion in outstanding shares, which often signals that the board believes the stock is undervalued, potentially leading to an increase in share price.
  • Current stock price is $152.87, which is near its 1-year high of $159.98, suggesting strong performance and investor confidence.
  • TE Connectivity Ltd. has shown resilience with a quarterly revenue of $3.84 billion, only slightly below the consensus estimate, indicating steady demand for its products.
  • Analysts have a consensus target price of $167.00, with several upgrades in ratings, reflecting positive sentiment and potential for price appreciation.

TE Connectivity Bear Case

Investors should be bearish about investing in TE Connectivity Ltd. for these reasons:

  • The company reported a quarterly revenue increase of only 0.1% compared to the same quarter last year, which may indicate stagnation in growth.
  • TE Connectivity Ltd. has a price-to-earnings (P/E) ratio of 24.42, which is relatively high, suggesting that the stock may be overvalued compared to its earnings.
  • Insider trading activity shows a decrease in ownership by insiders, with one insider selling 3,889 shares, which could raise concerns about confidence in the company's future performance.
  • Despite a strong market position, the company missed the revenue consensus estimate by $80 million, which could indicate challenges in meeting growth expectations.
  • With 91.43% of the stock owned by institutional investors, there may be less room for retail investors to influence the stock price, potentially leading to volatility based on institutional trading decisions.

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