Stock of the Day

May 4, 2021

TE Connectivity (TEL)

$164.78
+$2.46 (+1.5%)
Market Cap: $48.88B

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.:

  • The current stock price is around $162, reflecting a recent increase, which may indicate positive market sentiment towards the company.
  • TE Connectivity Ltd. reported a quarterly earnings per share (EPS) of $2.10, surpassing analysts' expectations, which suggests strong financial performance and potential for future growth.
  • The company has a market capitalization of approximately $48 billion, indicating its significant size and stability in the electronics sector.
  • TE Connectivity Ltd. has shown a revenue increase of 4.4% compared to the same quarter last year, demonstrating its ability to grow even in competitive markets.
  • Institutional investors and hedge funds own over 91% of the company's stock, which often reflects confidence in the company's long-term prospects.

TE Connectivity Bear Case

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

  • The price-to-earnings (P/E) ratio is around 25.9, which may suggest that the stock is overvalued compared to its earnings, potentially limiting future price appreciation.
  • Recent analyst ratings have shown mixed sentiments, with some firms lowering their target prices, indicating uncertainty about the stock's future performance.
  • The company has a beta of 1.24, suggesting that its stock price is more volatile than the market, which could pose risks for conservative investors.
  • Despite recent revenue growth, the company faces intense competition in the electronics market, which could impact its market share and profitability.
  • TE Connectivity Ltd. has a debt-to-equity ratio of 0.26, which, while relatively low, indicates that the company is not fully leveraging debt to fuel growth, potentially limiting expansion opportunities.
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