See our latest analysis for TE Connectivity.
TE Connectivity’s steady run has caught investor attention. The 25% share price return over the past three months stands out, and the one-year total shareholder return of 50% highlights a longer track record of outperformance. Momentum has clearly been building, suggesting the market is rewarding both recent execution and the company’s exposure to higher-growth tech applications.
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With such a strong rally behind it, the question now is whether TE Connectivity’s stock is still undervalued or if the recent surge has already priced in all the growth ahead, which could leave limited upside for new investors.
Most Popular Narrative: 4.1% Undervalued
The most widely followed narrative calculates a fair value of $228.81 for TE Connectivity, slightly above its recent close of $219.38. This sets the stage for a robust debate on whether the current share price leaves meaningful upside for investors.
Structural investments in manufacturing localization (over 70% now localized) and operational footprint optimization have enabled margin expansion. Industrial segment margins have risen nearly 400bps year-over-year, which should continue to support strong incremental earnings conversion as volumes grow.
Want to know why analysts think TE Connectivity could command a valuation normally reserved for tech giants? A bold mix of double-digit earnings growth, rising profit margins, and a future profit multiple few expect lies behind this price target. See which financial forecasts are adding fuel to the bullish case and decide if you agree with the narrative’s logic.
Result: Fair Value of $228.81 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, slowing demand in key AI and energy segments, or supply chain setbacks, could put pressure on both TE Connectivity's future margins and earnings growth.
Find out about the key risks to this TE Connectivity narrative.
Another View: Looking at Market Multiples
While the earlier fair value estimate suggests TE Connectivity is undervalued, market multiples paint a much pricier picture. The company’s price-to-earnings ratio is 44.6x, well above both its peers (31.1x) and the US Electronic industry average (24.9x). These higher multiples raise concerns about valuation risk if growth expectations falter. Is the market too optimistic, or is this premium justified?
See what the numbers say about this price — find out in our valuation breakdown.
Build Your Own TE Connectivity Narrative
If you see the numbers differently or would rather put the story together yourself, you can easily craft your own take in just a few minutes. Do it your way.
A great starting point for your TE Connectivity research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Valuation is complex, but we're here to simplify it.
Discover if TE Connectivity might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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