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1. Company Snapshot

1.a. Company Description

TE Connectivity Ltd., together with its subsidiaries, manufactures and sells connectivity and sensor solutions in Europe, the Middle East, Africa, the Asia–Pacific, 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, heat shrink tubing, 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 heat shrink tubing, interventional medical components, relays, and wires and cables for aerospace, defense, oil and gas, industrial equipment, 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.TE Connectivity Ltd.


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 incorporated in 2000 and is based in Schaffhausen, Switzerland.

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1.b. Last Insights on TEL

TE Connectivity's recent performance was driven by strong Q4 earnings, beating estimates, and fueled by gains in Industrial and Transportation segments. The company's solid fiscal Q4 growth was driven by rising orders and demand. Analysts boosted their forecasts after upbeat Q4 results. Institutional investors, such as Advisors Capital Management LLC and Bahl & Gaynor Inc., lifted their stakes in the company. The company's high ROE and attractive valuation also contributed to its performance. Its Q4 earnings per share was $2.44, beating the Zacks Consensus Estimate.

1.c. Company Highlights

2. TE Connectivity's Fiscal 2025 Results Exceed Expectations

TE Connectivity reported record sales, earnings, and free cash flow for fiscal 2025, with quarterly sales reaching $4.75 billion, a 17% increase on a reported basis and 11% organically year-over-year. Adjusted earnings per share were $2.44, beating estimates of $2.29 and representing a 25% increase versus the prior year. Full-year sales were a record $17.3 billion, growing 9% on a reported basis and 6% on an organic basis. Adjusted operating margins were 20%, expanding 80 basis points year-over-year, and adjusted earnings per share were $8.76, increasing 16% versus the prior year.

Publication Date: Oct -30

📋 Highlights
  • Q4 Sales Growth: Quarterly sales reached $4.75 billion, up 17% reported and 11% organic YoY.
  • Adjusted EPS Surge: Q4 adjusted EPS hit $2.44, rising 25% YoY, with full-year adjusted EPS at $8.76 (+16% YoY).
  • Industrial Segment Momentum: Industrial sales grew 24% reported and 18% organic, driven by AI revenue tripling to $900 million.
  • Free Cash Flow & Capital Deployment: Generated $3 billion in free cash flow, returning $2 billion to shareholders and investing $2.6 billion in acquisitions.
  • Q1 2026 Outlook: Anticipates $4.5 billion sales (17% reported growth) and $2.53 adjusted EPS (23% growth), with 100+ basis points gross margin improvement.

Segment Performance

The Industrial segment saw 24% reported growth, driven by bolt-on acquisitions, with organic segment growth of 18%. The Transportation segment continued to demonstrate its strong global position, with strength in Asia driving content growth. The Digital Data Networks segment had another outstanding quarter, growing 80% year-over-year, with the company generating over $900 million in AI revenue, tripling its AI sales versus the prior year.

Outlook and Guidance

Looking forward, order levels support the company's outlook for double-digit growth in the first quarter of fiscal 2026, with sales expected to be $4.5 billion, increasing 17% year-over-year on a reported basis and 11% organically. Adjusted earnings per share are expected to be around $2.53, representing growth of 23% year-over-year. Analysts estimate next year's revenue growth at 8.7%, which is slightly lower than the company's current guidance.

Valuation and Metrics

With a P/E Ratio of 38.56 and an EV/EBITDA of 18.35, the market appears to be pricing in a significant amount of growth for TE Connectivity. The company's ROIC of 8.87% and ROE of 14.9% indicate a strong ability to generate returns on invested capital. The dividend yield of 1.13% and free cash flow yield of 4.5% provide a relatively attractive return for shareholders.

Growth Opportunities

The company expects continued momentum in its products, driven by lower power, no latency, and higher speeds, particularly in AI, cloud, and other areas. The company's cash generation and healthy balance sheet give it continued optionality for uses of capital to support investments for future growth, both organically and through M&A. The upcoming Investor Day event on November 20 is expected to provide more detail on the company's growth strategy and opportunities.

3. NewsRoom

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TE Connectivity Ltd. $TEL Shares Sold by Capital Fund Management S.A.

Dec -04

Source: defenseworld.net

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TE Connectivity to hold annual general meeting of shareholders on March 11, 2026

Dec -01

Source: prnewswire.com

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Boston Family Office LLC Trims Holdings in TE Connectivity Ltd. $TEL

Dec -01

Source: defenseworld.net

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Bank of Nova Scotia Trust Co. Trims Stock Position in TE Connectivity Ltd. $TEL

Nov -28

Source: defenseworld.net

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Amphenol vs. TE Connectivity: Which Connector Stock is Most Suitable?

Nov -26

Source: zacks.com

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JPMorgan Has 15 Ideas for 'Bargain Hunting' Tech Stock Investors

Nov -22

Source: investopedia.com

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TE Connectivity Ltd. $TEL Shares Purchased by Bahl & Gaynor Inc.

Nov -22

Source: defenseworld.net

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5 Stocks With High ROE to Profit as Markets Perform Erratically

Nov -21

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.15%)

6. Segments

Transportation Solutions

Expected Growth: 7.5%

TE Connectivity's Transportation Solutions segment is poised for growth driven by increasing adoption of electric vehicles, rising demand for autonomous driving technologies, and growing need for high-speed data transmission in vehicles.

Industrial Solutions

Expected Growth: 6.3%

TE Connectivity Ltd. benefits from increasing demand for industrial automation, IoT, and renewable energy solutions, driving growth in its industrial solutions and components business.

Communications Solutions

Expected Growth: 7.4%

Growing demand for high-speed data and cloud computing is driving the communications solutions segment. Increasing adoption of 5G networks, IoT devices, and data centers is expected to fuel growth, with a focus on high-reliability and miniaturized connectors and antennas.

7. Detailed Products

Terminal and Connector

TE Connectivity's terminal and connector products are designed to connect and terminate wires and cables in a wide range of applications, including automotive, industrial, and consumer electronics.

Relays

TE Connectivity's relays are designed to switch electrical circuits on and off, and are used in a variety of applications, including automotive, industrial, and aerospace.

Fuses

TE Connectivity's fuses are designed to protect electrical circuits from overcurrent conditions, and are used in a variety of applications, including automotive, industrial, and consumer electronics.

Circuit Protection

TE Connectivity's circuit protection products are designed to protect electrical circuits from overvoltage, overcurrent, and other fault conditions, and are used in a variety of applications, including automotive, industrial, and consumer electronics.

Antennas

TE Connectivity's antennas are designed to transmit and receive radio frequency signals, and are used in a variety of applications, including wireless communication systems, automotive systems, and industrial equipment.

Sensors

TE Connectivity's sensors are designed to detect and measure physical parameters such as temperature, pressure, and position, and are used in a variety of applications, including automotive, industrial, and consumer electronics.

Connectivity and Cable Assemblies

TE Connectivity's connectivity and cable assemblies are designed to connect and transmit data, power, and signals in a variety of applications, including data centers, automotive systems, and industrial equipment.

Radar and Microwave Components

TE Connectivity's radar and microwave components are designed to transmit and receive high-frequency signals, and are used in a variety of applications, including radar systems, satellite communications, and microwave ovens.

Aerospace, Defense and Marine

TE Connectivity's aerospace, defense, and marine products are designed to meet the unique requirements of these industries, including high-reliability, high-temperature, and high-vibration applications.

Industrial and Commercial Transportation

TE Connectivity's industrial and commercial transportation products are designed to meet the unique requirements of these industries, including high-reliability, high-temperature, and high-vibration applications.

Consumer and Commercial Devices

TE Connectivity's consumer and commercial devices products are designed to meet the unique requirements of these industries, including high-reliability, high-temperature, and high-vibration applications.

8. TE Connectivity Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

TE Connectivity Ltd. operates in a niche market with high barriers to entry, reducing the threat of substitutes. However, the company's products are not entirely unique, and customers may find alternative solutions.

Bargaining Power Of Customers

TE Connectivity Ltd. has a diverse customer base, reducing the bargaining power of individual customers. The company's products are also critical components in customers' systems, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

TE Connectivity Ltd. relies on a few key suppliers for critical components. While the company has some bargaining power due to its size, suppliers may still exert some pressure on prices and delivery terms.

Threat Of New Entrants

The barriers to entry in TE Connectivity Ltd.'s markets are high, including significant capital expenditures and technological expertise. New entrants would face significant challenges in competing with the company's established products and customer relationships.

Intensity Of Rivalry

TE Connectivity Ltd. operates in a highly competitive industry with several established players. The company must continually innovate and invest in research and development to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 26.72%
Debt Cost 3.95%
Equity Weight 73.28%
Equity Cost 10.70%
WACC 8.90%
Leverage 36.46%

11. Quality Control: TE Connectivity Ltd. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 5.5/10

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Growth: 6.6

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A-Score: 4.4/10

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Quality: 7.6

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

232.98$

Current Price

232.98$

Potential

-0.00%

Expected Cash-Flows