TEL Stock Forecast & Price Target

TE Connectivity demonstrated a robust financial performance with an increased operating margin of 18.7%, marking a significant growth of 337 basis points quarter-over-quarter and 166 basis points year-over-year, with management projecting sustained high-teen margins for FY24. The company also reported strong sales growth across key segments, particularly in automotive and aerospace, with automotive sales rising 7.7% year-over-year and aerospace, defense, and marine sales growing 13% organically. Additionally, the substantial improvement in segment adjusted gross margin to 34.6% reflects effective portfolio optimization strategies and favorable market dynamics, reinforcing a positive outlook for the company’s financial strength and operational efficiency.

TE Connectivity's financial outlook is negatively impacted by significant declines in several key business segments, particularly in Industrial Solutions, where sales fell by 11.6% quarter-over-quarter and 3.3% year-over-year, largely due to ongoing inventory corrections in the industrial equipment market. Additionally, the Communications Solutions segment showed a 17.0% year-over-year decline in sales, with particular weakness in Data & Devices and Appliances, suggesting persistent issues related to customer de-stocking. Overall operating margins also deteriorated, decreasing by 75 basis points sequentially and 139 basis points year-over-year to 15.1%, further highlighting the company's challenges in sustaining profitability amid market volatility.