TE Connectivity (TEL): Evaluating the Stock's Value After Strong Earnings Growth and Upbeat Outlook

TE Connectivity (TEL) just released its fourth quarter results, showing big jumps in both sales and net income from last year. The company also shared an optimistic outlook for the next quarter, with strong growth expected.

See our latest analysis for TE Connectivity.

TE Connectivity’s upbeat quarter has helped build real momentum. The share price has jumped more than 17% over the past 90 days, with a standout year-to-date gain of 71%. Long-term investors have seen a 157.9% total return over five years. That recent strength suggests sentiment is shifting toward growth, especially with management’s bullish outlook fueling further optimism.

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With shares already surging and analyst price targets climbing, investors now face a critical question: Is TE Connectivity undervalued after this earnings boost, or is all that future growth already reflected in the stock price?

Most Popular Narrative: 2.8% Overvalued

With TE Connectivity closing at $240.76 and the narrative estimating a fair value of $234.18, the current price stands just above this popular benchmark, sparking debate around the stock’s rapid rise.

TE Connectivity's rapid revenue growth in AI-driven data center infrastructure demonstrates the increasing global demand for high-performance connectivity, supported by a near tripling of AI-related revenue from $300M to over $800M in fiscal 2025. Continued investment and scaling suggest this trend will fuel further top-line growth and maintain above-segment margins.

Read the complete narrative.

Curious about the projections driving this valuation? The narrative hinges on a bold call: future profits and margins expanding at a pace that could outstrip sector averages. Wondering what assumptions underpin this number? Just wait till you see the growth figures guiding this fair value.

Result: Fair Value of $234.18 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, future earnings could be pressured if AI demand slows or if global supply chain hurdles reduce TE Connectivity's margin expansion momentum.

Find out about the key risks to this TE Connectivity narrative.

Build Your Own TE Connectivity Narrative

Not convinced by the consensus or eager to put your own insights to the test? It takes less than three minutes to build your own perspective and uncover fresh angles. 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.

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