تحليلات المنتج الاختيارية
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The most significant opportunity for TE Connectivity lies in the rapid scaling of high-density artificial intelligence cloud data center interconnect architectures, targeting $3 billion in revenue by FY2027.
Transportation Solutions revenue growth contracting by more than 5.0% year-over-year over two consecutive quarters.
We assign a Reduce rating to TE Connectivity Ltd.. At the analysis price of $211.08 as of September 30, 2026, the shares trade at a 23.27% premium to our house Fair value of $171.23, representing an implied return of -18.88% that warrants trimming positions.4
Our rating is Reduce. For an ordinary investor, this means trimming existing holdings and avoiding fresh capital commitments, as market valuation has outpaced underlying cash generation capacity despite sound operational quality.6
The stock traded at $211.08 on September 30, 2026. This price sits 23.27% above our house Fair value of $171.23, which corresponds to an implied return of -18.88%. Even against our Potential value of $210.43, representing the high end of our valuation range, the report-date price of $211.08 exceeds full operational execution value by 0.31%.
The principal risk to the business is a protracted slowdown in global automotive production alongside delayed electric vehicle rollouts. Transportation Solutions generated $9,388 million, or 54.4% of total sales, in FY2025. If automotive build rates weaken further and push Transportation Solutions revenue down by more than 5.0% year-over-year, manufacturing underabsorption would compress consolidated operating margins below 16.50% from the 18.60% achieved in FY2025, eroding free cash flow and driving intrinsic value lower.578
The main catalyst that could support valuation is expanding high-speed connectivity and power distribution in artificial intelligence cloud data centers, where management reaffirmed a $3 billion revenue target by FY2027. Because hyper-scale data centers require simultaneous engineering solutions for high-speed signal transmission and severe power delivery constraints, proprietary design wins in server rack interconnects could accelerate Industrial Solutions growth beyond current forecasts, lifting consolidated operating margins toward 19.50% and supporting our Potential value of $210.43.5
Customers require component suppliers who solve simultaneous trade-offs and constraints across data signal chains and power chains at the rack and vehicle level. In Transportation Solutions ($9,388M FY2025 revenue), deep multi-year OEM qualification cycles embed connectors into automotive wiring harnesses and battery management systems.58
TE maintains proprietary tooling and design patents across high-voltage automotive terminals and AI cloud interconnects, enabling an 18.60% GAAP operating margin in FY2025. Industrial Solutions generated $7,874M in FY2025, supported by ongoing restructuring actions ($100M guided in FY2026) to protect high-margin specialized product lines.578
Operating across Americas ($4,968M revenue), EMEA ($5,742M), and Asia-Pacific ($6,552M), TE's global scale creates supply security and localized production that smaller component suppliers cannot replicate.8
We rate TE Connectivity a Reduce because the report-date price of $211.08 sits at an elevated 23.27% premium over our house Fair value of $171.23, yielding an unfavourable -18.88% implied return that leaves investors exposed to automotive cyclical softening.4
TE CONNECTIVITY PLC manufactures and sell a broad portfolio of products to customers in various industries. Its customers include many of the leaders in their respective industries, and its relationships with them typically date back many years. TE CONNECTIVITY PLC manufactures its products in over 25 countries worldwide. Its manufacturing sites focus on various aspects of its manufacturing processes, including its primary processes of stamping, plating, molding, extrusion, beaming, and TE CONNECTIVITY PLC now operates through two reportable segments: Transportation Solutions and Industrial Solutions.
TE CONNECTIVITY PLC believes its two segments served a combined market of approximately $200 billion as of fiscal year end 2025. Below is a description of its reportable segments and the primary products, markets, and competitors of each segment.
A severe macroeconomic stress scenario combines a prolonged automotive volume contraction with aggressive price competition in standard connectors and elevated capital costs. If global vehicle production drops significantly, Transportation Solutions revenue ($9,388M in FY2025) would fall by over 5% annually, leaving TE's capital-intensive manufacturing network underutilized. Operating margins, which reached 18.60% in FY2025, would compress toward 15.60% or lower, reminiscent of prior downcycles (14.37% in FY2023 and 4.41% in FY2020). Simultaneously, geopolitical friction across China ($4,610M in FY2025 revenue) and refinancing costs on $6,550M total debt would drive the cost of capital above 11.30%. Under this compounded stress, free cash flow generation would contract sharply from FY2025 levels of $3,203M, forcing a deceleration in share buybacks and driving intrinsic valuation down toward the low endpoint of $111.82.
The bear scenario envisions a cyclical downturn in global automotive production combined with aggressive price competition in standard connectors and China margin compression. Slower AI datacenter rollouts and tariff frictions restrict top-line growth while factory underabsorption impairs operating profitability. A downside case exists reflecting these compounding headwinds, although its target and probability are evaluated exclusively in the dedicated bear-case section.
Transportation Solutions generated $9,388M (54.4%) of consolidated revenue in FY2025. Management acknowledged that vehicle production is already declining slightly. If global automotive manufacturing enters a prolonged cyclical downturn causing Transportation segment revenue to contract by more than 5% YoY over two consecutive quarters, fixed overhead underabsorption across manufacturing plants would trigger severe operational deleverage and impair segment cash flows.58
التطورات الخمسة التي قد تضعف أطروحتنا الاستثمارية.
Persistent automotive production declines overwhelming content gains per vehicle, signalling factory underabsorption and margin degradation.
الحالي:11% YoY Q4 guided growth and $9,388M FY2025 revenue
تنبيه إذا< -5.0% YoY over two consecutive quarters
TE Connectivity possesses a durable narrow economic moat established upon high customer switching costs and proprietary design intellectual property across harsh-environment connectivity. The company operates as a critical integration partner for automotive original equipment manufacturers and industrial automation providers. When automotive OEMs design vehicle electrical architectures, connectors and wiring harness systems are co-engineered years prior to commercial production. Replacing an incumbent connector supplier entails prohibitive engineering re-qualification costs, supply chain disruption risks, and regulatory safety validation delays.
This switching cost advantage is prominently demonstrated in Transportation Solutions, which generated $9,388M (54.4%) of FY2025 consolidated revenue. As vehicles transition toward hybrid and battery electric platforms, high-voltage signal and power architectures require specialized thermal management, vibration resilience, and shielding capabilities. TE's proprietary terminals and harsh-environment connector systems secure sole-source or preferred positions across multi-year vehicle production cycles, insulating baseline pricing against generic commodity component suppliers.
In Industrial Solutions ($7,874M in FY2025), TE is expanding its competitive reach into AI cloud datacenters, targeting $3B in annual sales by FY2027. As highlighted by CEO Terrence Curtin, hyperscale customers require suppliers who can simultaneously solve complex trade-offs and constraints across data signal chains and power chains at the server rack. The strategic acquisition of Astrodyne TDI for $1.4B further reinforces TE's proprietary power distribution capabilities alongside high-speed optical and copper interconnects.
Nonetheless, the moat remains narrow rather than wide due to structural limitations in standard connector product categories and formidable peer competition. In standard, lower-voltage automotive and industrial interconnects, specialized competitors such as Amphenol exert continuous pricing pressure. Amphenol operates at a 29.78% operating margin, significantly above TE's 18.60%. Furthermore, TE's operating margins historically demonstrated cyclical volatility, dropping to 14.37% in FY2023 and 4.41% in FY2020 during industrial demand contractions, confirming that switching costs moderate but do not entirely eliminate macro cyclical exposure.
TE Connectivity generated FY2025 operating income of $3,211M on revenue of $17,262M and net income of $1,842M. The business generates an 11.18% return on invested capital, exceeding both the computed WACC of 9.3020% and moderate cost of equity of 9.8086%. This positive economic profit spread is sustained by strong cash generation, with FY2025 free cash flow reaching $3,203M on capital expenditures of $936M.2
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
The highlighted cell is Fair value when every assumption sits at its base level ($171.23). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $2.2B after modeled reinvestment of $549.3M, with terminal value at 73.9% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
The base scenario reflects the modal operating trajectory: steady execution across automotive and industrial platforms, moderate top-line growth supported by AI datacenter demand reaching management targets, and disciplined restructuring supporting modest operating margin expansion. Under these conditions, intrinsic Fair value is $171.23 with an estimated probability of 60.0%, reflecting an implied return of -18.9% from the analysis price of $211.08 (as of 2026-09-30).
A quarterly beat driven by accelerated AI datacenter interconnect deliveries and resilient automotive content per vehicle would confirm operating leverage, but shares trading above Fair value $171.23 would keep valuation stretched.
Meeting guided expectations confirms stable execution across Transportation Solutions and Industrial Solutions, but with the market price at $211.08 sitting at an implied return of -18.9% to Fair value $171.23, risk-reward remains unfavorable.
An earnings miss signaling automotive volume weakness or standard connector price concessions would confirm kill-scenario dynamics, further impairing intrinsic value.
Earnings quality remains robust, supported by free cash flow conversion exceeding net earnings and conservative revenue recognition across long-term component supply contracts. Operating cash flow reliably exceeds reported net profit, driven by working capital discipline and non-cash depreciation add-backs. Stock-based compensation represents a modest fraction of operating cash flow, and management targets full conversion of net income into free cash flow for the full fiscal year. The primary quality risk stems from cyclical inventory adjustments across customer channels during automotive volume contractions.
Transportation Solutions accounts for more than half of consolidated revenue; any volume slowdown impairs plant absorption and erodes operating margins.
Cash flow generation remains exceptionally robust. FY2025 operating cash flow of $4,139M and free cash flow of $3,203M significantly outpaced GAAP net income of $1,842M, representing a cash conversion of 173.89%. Management guided ~100% free cash flow conversion for FY2026. Capital expenditures of $936M represented 5.42% of revenue ($17,262M) and 1.12x depreciation ($838M). Maintenance capex is estimated at 75% of total capex ($702M), leaving substantial owner earnings ($1,978M in FY2025) to fund capital returns and strategic growth initiatives without compromising liquidity.
ROIC is benefiting from margin expansion toward 19.5% and positive operating leverage in AI cloud interconnects. Continued disciplined capex (~5.4% of revenue) and high asset turnover ensure economic returns remain above capital costs across the forecast cycle, though terminal reinvestment of 22.4% explicitly bridges terminal growth (2.5%) to maintain perpetual incremental ROIC near 11.16%.
Current ROIC of 11.18% exceeds computed WACC of 9.3020% and moderate cost of equity of 9.8086%, generating positive spread of ~188 bps over WACC.
| الإيرادات | 5,160,000,000 US$ |
|---|---|
| تكلفة الإيرادات | 3,325,000,000 US$ |
| إجمالي الربح | 1,835,000,000 US$ |
| المصروفات التشغيلية | 854,000,000 US$ |
| الدخل التشغيلي | 981,000,000 US$ |
| البنود غير التشغيلية والضرائب | -233,000,000 US$ |
| صافي الدخل | 748,000,000 US$ |
| إجمالي الأصول | 25,081,000,000 US$ |
|---|---|
| النقد | 1,255,000,000 US$ |
| الأصول المتداولة | 7,966,000,000 US$ |
| إجمالي الالتزامات | 12,351,000,000 US$ |
| الالتزامات المتداولة | 5,120,000,000 US$ |
| حقوق المساهمين | 12,585,000,000 US$ |
| صافي الدخل | 1,842,000,000 US$ |
|---|---|
| التدفق النقدي التشغيلي الداخل | 4,139,000,000 US$ |
| الإهلاك والإطفاء | 838,000,000 US$ |
| التعويض القائم على الأسهم | 149,000,000 US$ |
| تعديلات تشغيلية أخرى | 1,310,000,000 US$ |
| التدفق النقدي التشغيلي | 4,139,000,000 US$ |
| النقد المتاح | 5,458,000,000 US$ |
| النقد في بداية الفترة | 1,319,000,000 US$ |
| التدفق الاستثماري الخارج | 3,568,000,000 US$ |
| النفقات الرأسمالية | 936,000,000 US$ |
| أنشطة استثمارية أخرى | 2,632,000,000 US$ |
| التدفق التمويلي الخارج | 629,000,000 US$ |
| تأثير سعر الصرف | 6,000,000 US$ |
| النقد في نهاية الفترة | 1,255,000,000 US$ |
| التدفق النقدي الاستثماري | -3,568,000,000 US$ |
| التدفق النقدي التمويلي | -629,000,000 US$ |
المصدر: SEC EDGAR · تاريخ الإيداع 2025-11-10 · SEC EDGAR
| الإيرادات حسب القطاع التشغيلي | الإيرادات | الحصة | على أساس سنوي |
|---|---|---|---|
| Transportation Solutions | 9.4 مليار US$ | 54.4% | -1% |
| Industrial Solutions | 7.9 مليار US$ | 45.6% | 23.7% |
البيانات المالية في نقطة زمنية المستخدمة في تحليل 2026-10-01.
| الفترة | الإيرادات | EBITDA | صافي الدخل | التدفق النقدي التشغيلي | التدفق النقدي الحر | النفقات الرأسمالية | الإهلاك والإطفاء | التعويض القائم على الأسهم | إعادة شراء الأسهم | أرباح الأسهم المدفوعة | صافي إصدار الدين | التدفق النقدي الاستثماري | التدفق النقدي التمويلي | النقد في بداية الفترة | النقد في نهاية الفترة | النقد والاستثمارات | إجمالي الديون | الهامش التشغيلي | ROIC | WACC | فارق ROIC−WACC |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017-09-29 | 12.2 مليار US$ | 2.5 مليار US$ | 1.7 مليار US$ | 2.3 مليار US$ | 1.6 مليار US$ | 679 مليون US$ | 611 مليون US$ | 95 مليون US$ | 614 مليون US$ | 546 مليون US$ | — | -932 مليون US$ | -814 مليون US$ | 647 مليون US$ | 1.2 مليار US$ | 1.2 مليار US$ | 4.3 مليار US$ | 15.4% | — | 5.9% | — |
| 2018-09-28 | 14 مليار US$ | 3 مليار US$ | 2.6 مليار US$ | 2.5 مليار US$ | 1.5 مليار US$ | 935 مليون US$ | 667 مليون US$ | 95 مليون US$ | 879 مليون US$ | 588 مليون US$ | — | -1.1 مليار US$ | -1.7 مليار US$ | 1.2 مليار US$ | 848 مليون US$ | 848 مليون US$ | 4 مليار US$ | 16.7% | — | 6.6% | — |
| 2019-09-27 | 13.4 مليار US$ | 2.7 مليار US$ | 1.8 مليار US$ | 2.4 مليار US$ | 1.7 مليار US$ | 749 مليون US$ | 690 مليون US$ | 75 مليون US$ | 1.1 مليار US$ | 608 مليون US$ | — | -692 مليون US$ | -1.6 مليار US$ | 848 مليون US$ | 927 مليون US$ | 927 مليون US$ | 4 مليار US$ | 14.7% | — | 5.9% | — |
| 2020-09-25 | 12.2 مليار US$ | 1.3 مليار US$ | -241 مليون US$ | 2 مليار US$ | 1.4 مليار US$ | 560 مليون US$ | 711 مليون US$ | 74 مليون US$ | 523 مليون US$ | 625 مليون US$ | — | -865 مليون US$ | -1.1 مليار US$ | 927 مليون US$ | 945 مليون US$ | 945 مليون US$ | 5 مليار US$ | 4.4% | — | 5.0% | — |
| 2021-09-24 | 14.9 مليار US$ | 3.2 مليار US$ | 2.3 مليار US$ | 2.7 مليار US$ | 2 مليار US$ | 690 مليون US$ | 769 مليون US$ | 94 مليون US$ | 831 مليون US$ | 647 مليون US$ | — | -1 مليار US$ | -1.4 مليار US$ | 945 مليون US$ | 1.2 مليار US$ | 1.2 مليار US$ | 4.9 مليار US$ | 16.3% | — | 6.1% | — |
| 2022-09-30 | 16.3 مليار US$ | 3.6 مليار US$ | 2.4 مليار US$ | 2.5 مليار US$ | 1.7 مليار US$ | 768 مليون US$ | 785 مليون US$ | 119 مليون US$ | 1.4 مليار US$ | 685 مليون US$ | 400 مليون US$ | -878 مليون US$ | -1.7 مليار US$ | 1.2 مليار US$ | 1.1 مليار US$ | 1.1 مليار US$ | 4.9 مليار US$ | 16.9% | — | 8.3% | — |
| 2023-09-29 | 16 مليار US$ | 3.1 مليار US$ | 1.9 مليار US$ | 3.1 مليار US$ | 2.4 مليار US$ | 732 مليون US$ | 794 مليون US$ | 123 مليون US$ | 945 مليون US$ | 725 مليون US$ | -132 مليون US$ | -768 مليون US$ | -1.8 مليار US$ | 1.1 مليار US$ | 1.7 مليار US$ | 1.7 مليار US$ | 4.9 مليار US$ | 14.4% | — | 9.1% | — |
| 2024-09-27 | 15.8 مليار US$ | 3.7 مليار US$ | 3.2 مليار US$ | 3.5 مليار US$ | 2.8 مليار US$ | 680 مليون US$ | 826 مليون US$ | 127 مليون US$ | 2.1 مليار US$ | 760 مليون US$ | -79 مليون US$ | -950 مليون US$ | -2.9 مليار US$ | 1.7 مليار US$ | 1.3 مليار US$ | 1.3 مليار US$ | 5 مليار US$ | 17.6% | — | 8.4% | — |
| 2025-09-26 | 17.3 مليار US$ | 4.1 مليار US$ | 1.8 مليار US$ | 4.1 مليار US$ | 3.2 مليار US$ | 936 مليون US$ | 838 مليون US$ | 149 مليون US$ | 1.3 مليار US$ | 803 مليون US$ | 1.4 مليار US$ | -3.6 مليار US$ | -629 مليون US$ | 1.3 مليار US$ | 1.3 مليار US$ | 1.3 مليار US$ | 6.6 مليار US$ | 18.6% | — | 8.7% | — |
TE Connectivity Ltd. (TEL) trades at 16.6x forward earnings against a peer median of 20.6x. Its EV/EBITDA of 13.3x compares with a peer median of 21.7x. The comparison uses 4 peers: Flex Ltd., Amphenol Corporation, Garmin Ltd. and Intuit Inc., as of 2026-10-01.
Electronics industry benchmark capex-to-depreciation ratio stands at 1.41x and industry capex-to-revenue is 5.70%. For TE Connectivity, FY2025 capex of $936M represents 5.42% of revenue ($17,262M) and 1.12x depreciation of $838M, reflecting disciplined expansion into AI power and automated manufacturing lines.7
Accelerating transition to high-voltage EV platforms, autonomous driving sensor suites, and AI datacenter server racks expanding power distribution content per unit. Reaffirmed $3B AI cloud revenue target by FY2027 coupled with $400M year-over-year Transportation order growth fuels revenue expansion toward $21,675M in FY2027 and drives operating margins toward 19.5%.
A broader industrial capital expenditure slowdown coupled with prolonged global automotive manufacturing contraction (where vehicle production is already down slightly). Margin compression follows underabsorption across TE's extensive factory network, pulling operating margins below 16.5% toward downcycle troughs seen in FY2023 (14.37%) and FY2020 (4.41%), while tariff barriers in China ($4,610M revenue) impair volume.
TE Connectivity is positioned as an established leader in harsh-environment connectivity, commanding dominant share in automotive Transportation Solutions ($9,388M FY2025 revenue) and Industrial Solutions ($7,874M FY2025 revenue). Management's dual competency across both power and signal chains allows TE to capture content gains in AI cloud data centers (targeting $3B by FY2027) even as overall automotive vehicle build rates remain slightly down. However, its growth pace trails pure-play peers like Amphenol (consensus growth 23%).158
Under a Reduce rating with the market price of $211.08 trading at an implied return of -18.88% to Fair value of $171.23, exposure should be restricted to zero or an underweight stance (0-1% of portfolio equity). Risk-reward is skewed negatively given cyclical automotive headwinds and elevated valuation.4
Risk management requires systematic position reduction at current prices ($211.08), where the stock trades at an implied return of -18.88% relative to Fair value of $171.23. Any technical bounce toward recent 52-week highs ($252.56) should be utilized for disciplined selling, with portfolio exposure strictly capped below 1%.
Value investors should avoid initiating new positions because the current stock price of $211.08 trades at a 23.27% premium over our house Fair value of $171.23. With no margin of safety and an implied return of -18.88%, the risk-reward profile is skewed negatively.4
Growth-oriented investors should avoid adding capital at current multiples (forward P/E of 16.56x). While the reaffirmed $3 billion AI cloud revenue target for FY2027 represents an attractive growth vector, it constitutes only a portion of consolidated revenue, and ongoing slight declines in global vehicle production cap overall top-line expansion.45
Long-term institutional holders with significant embedded tax liabilities may hold existing baseline allocations rather than executing complete exits, given TE Connectivity's disciplined capital return ($2 billion returned so far in FY2026), strong ~100% free cash flow conversion, and solid narrow moat. However, fresh capital additions must be avoided and overweight positions should be trimmed.5
We recommend reducing exposure to TE Connectivity Ltd. based on our house Fair value of $171.23 per share. At the report-date price of $211.08 as of September 30, 2026, the stock trades at an implied return of -18.88% and a 23.27% premium over intrinsic value. While TE Connectivity maintains a defensible narrow economic moat supported by customer switching costs in co-engineered connectivity, market pricing already embeds aggressive top-line acceleration and peak operating margins, leaving little buffer for automotive cyclical volatility.45
Investors should systematically trim positions into market strength and reallocate proceeds toward securities offering an adequate margin of safety. While free cash flow conversion remains exceptionally healthy near 100% of net income and capital return via share repurchases continues, total debt of $6,550 million and capital requirements for the $1.4 billion Astrodyne TDI transaction will moderate discretionary buyback velocity. Re-entry should be deferred until the share price trades closer to our Fair value of $171.23.
دوّن أطروحتك الاستثمارية وحجم مركزك وأسئلة المتابعة. تبقى على هذا الجهاز، ولا يراها أحد سواك.
The records this analysis drew on, as they stood when it was run.
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
TE achieved an 18.60% GAAP operating margin in FY2025 on $17,262M revenue, whereas competitor Amphenol achieved 29.78%. Historical margins compressed to 14.37% in FY2023 and 4.41% in FY2020. Aggressive competitor discounting in standard interconnects combined with localized pricing pressure across China ($4,610M revenue) could compress normalized operating margins below 15.60%, wiping out projected operating leverage.378
The current computed WACC of 9.3020% and moderate Ke of 9.8086% rely on a 5.26% risk-free rate and total debt of $6,550M. If persistent macroeconomic interest rates and heightened geopolitical risk across Greater China (26.7% of FY2025 revenue) elevate the discount rate upward by 200 bps above 11.30%, enterprise valuation multiples would face severe contraction.248
Pricing erosion in standard connectors and China margin degradation overwhelming restructuring benefits and compressing profitability.
الحالي:18.60% in FY2025
تنبيه إذا< 16.50% normalized operating margin
Standard connector price discounting and input cost inflation eroding manufacturing gross margins across Transportation and Industrial platforms.
الحالي:35.0% estimated baseline from FY2025 operating profitability
تنبيه إذا< 33.0% for the fiscal year
Working capital bloat and elevated capex requirements reducing cash conversion, curtailing share repurchase capacity.
الحالي:173.89% in FY2025 ($3,203M FCF / $1,842M net income)
تنبيه إذا< 80.0% conversion of net income
Elevated cost of debt and geopolitical equity risk premium expansion repricing discount rates across discounted cash flow models.
الحالي:9.3020% computed WACC
تنبيه إذا> 11.30% WACC
| high |
| 6-18 months |
| Content expansion per vehicle in hybrid and electric platforms alongside order momentum in Industrial Solutions and AI cloud connectivity targeting $3B by 2027.5 |
| Geopolitical trade friction and domestic supplier displacement across China | medium | 18-36 months | Localized manufacturing presence in China ($4,610M revenue in FY2025) serving domestic auto OEMs and global multi-region redundancy.8 |
Under the moderate discount rate, 56.68 US$ comes from forecast-period earnings and 148 US$ from the long-term value, totaling 205 US$.
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and terminal value at WACC, then adjust for signed net debt per current share.
Discounted forecast-period cash flows (32.79 US$) plus discounted terminal value (92.60 US$) minus signed per current share (18.26 US$) equals the 107 US$ lens value shown above. Negative net debt is , so subtracting it raises value.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
Solve for the growth rate that makes the model value equal the report-date share price.
Project revenue, apply a terminal EV/revenue multiple, discount enterprise value, subtract net debt, and divide by diluted shares.
In the bull scenario, accelerating AI cloud datacenter interconnect attach rates propel high-speed connectivity revenue while automotive electrification drives high-voltage dollar content per vehicle. Operating margins expand toward peak levels as fixed overhead absorbs increased production volumes. Valuation reaches $210.43 with an estimated probability of 20.0%, representing an implied return of -0.3% from $211.08 (as of 2026-09-30).
AI datacenter interconnect demand provides the primary high-margin top-line catalyst required to offset mature automotive cyclicality.
Sustaining operating profitability above historical downcycle troughs confirms pricing power and operating leverage from higher-margin product mix.
High cash conversion supplies the surplus liquidity required to fund disciplined share buybacks and strategic acquisitions without overleveraging the balance sheet.
Manufacturing efficiency gains are critical to defending gross margins against standard connector price competition and inflation.
| $21.48B |
| $22.55B |
| $23.46B |
| Revenue growth | 9.2% | 7.5% | 6.0% | 5.0% | 4.0% |
| Operating margin | 18.8% | 19.0% | 19.2% | 19.4% | 19.5% |
| Operating income | $3.54B | $3.85B | $4.12B | $4.38B | $4.57B |
| Tax rate | 22.5% | 22.5% | 22.5% | 22.5% | 22.5% |
| NOPAT | $2.75B | $2.98B | $3.20B | $3.39B | $3.54B |
| Reinvestment | $549.29M | $596.77M | $703.16M | $746.01M | $794.03M |
| Reinvestment rate (of NOPAT) | 20.0% | 20.0% | 22.0% | 22.0% | 22.4% |
| Free cash flow to firm | $2.20B | $2.39B | $2.49B | $2.64B | $2.75B |
| Transportation Solutions revenue | $10.25B | $11.02B | $11.68B | $12.27B | $12.76B |
| Industrial Solutions revenue | $8.60B | $9.24B | $9.80B | $10.29B | $10.70B |
| Terminal growth | 2.5% | 2.5% | 2.5% | 2.5% | 2.5% |
TE Connectivity demonstrates disciplined capital allocation focused on shareholder returns and bolt-on acquisitions. In FY2025, operating cash flow reached $4,139M and free cash flow was $3,203M after capital expenditures of $936M. Management returned approximately $2B to shareholders through dividends and share buybacks year-to-date in FY2026, continuing a trend of aggressive share repurchases ($1,347M in FY2025) that reduced diluted shares outstanding to 299M. Stock-based compensation was modest at $149M, ensuring real share count reduction (-1.0% modeled annually). M&A is targeted, exemplified by the announced $1.4B acquisition of Astrodyne TDI generating over $250M in annual sales to enhance power capabilities. Total debt of $6,550M against cash of $1,255M yields net debt of $5,295M, maintaining manageable leverage (debt weight 8.68%).
FY2025 operating cash flow was $4,139M and free cash flow was $3,203M compared to GAAP net income of $1,842M, with management targeting ~100% conversion in FY2026.
Earnings quality is high and underpins sustainable dividend payments and share repurchases, although net margin of 10.67% lags premier peers like Amphenol (17.73%).
Operating income reached $3,211M on $17,262M revenue in FY2025 (18.60% margin), supported by $100M restructuring actions in FY2026 and guided FY2026 adjusted EPS growth of 23%.
Structural cost reductions and high-margin AI datacenter interconnects defend profitability against standard connector pricing pressure, though margins remain cyclical relative to historical troughs (14.37% in FY2023).
Total debt of $6,550M minus cash of $1,255M yields net debt of $5,295M, representing ~1.65x FY2025 FCF ($3,203M) with pre-tax cost of debt at 5.80%.
Balance sheet leverage is sound, though the $1.4B Astrodyne TDI cash commitment will temporarily moderate share repurchase velocity.
| الهامش |
|---|
| TEL | TE Connectivity Ltd. | $61.2B | 16.6x | 3.2x | 13.3x | 23.3% | — |
| FLEX | Flex Ltd. | $40.6B | 15.5x | 1.4x | 20.6x | 18.4% | 5.0% |
| APH | Amphenol Corporation | $207.9B | 25.6x | 7.2x | 23.4x | 38.1% | 29.8% |
| GRMN | Garmin Ltd. | $55.3B | 26.1x | 7.2x | 22.9x | 21.9% | 30.4% |
| INTU | Intuit Inc. | $73.7B | 10.2x | 3.4x | 10.9x | 23.6% | 17.6% |
| Supply Chain Localization and Geopolitical Fragmentation | neutral | Rising trade tensions and localization requirements challenge global manufacturing footprints. TE's established multi-region manufacturing across Americas ($4,968M), EMEA ($5,742M), and China ($4,610M) provides resilience but increases structural compliance and duplication costs. |
| Reduce target Fair value by 15% and accelerate exit schedule. |
| Free cash flow conversion to net income | < 80.0% conversion | Cut share repurchase assumptions in valuation model and lower fair value estimate. |
