Here's What Analysts Are Forecasting For TE Connectivity Ltd. (NYSE:TEL) After Its Second-Quarter Results

TE Connectivity Ltd. (NYSE:TEL) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues of US$4.0b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$1.75, missing estimates by 2.1%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for TE Connectivity

Taking into account the latest results, TE Connectivity's 19 analysts currently expect revenues in 2024 to be US$16.0b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be US$11.26, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$16.1b and earnings per share (EPS) of US$11.37 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$161. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values TE Connectivity at US$186 per share, while the most bearish prices it at US$135. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that TE Connectivity's revenue growth is expected to slow, with the forecast 1.6% annualised growth rate until the end of 2024 being well below the historical 5.6% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.7% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than TE Connectivity.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$161, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on TE Connectivity. Long-term earnings power is much more important than next year's profits. We have forecasts for TE Connectivity going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for TE Connectivity (1 is a bit unpleasant!) that you should be aware of.

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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.