On Thursday, BofA Securities increased its price target on TE Connectivity (NYSE:) shares to $170 from $165, while reaffirming its Buy rating on the stock.
The adjustment comes ahead of the company’s fiscal third-quarter earnings release scheduled for July 24, 2024. BofA Securities bases its optimism on the company’s ability to grow its content per vehicle and maintain overall growth and profitability.
The firm anticipates TE Connectivity to report revenues and earnings per share for the fiscal third quarter at $4.0 billion and $1.85, respectively. These figures are just shy of the consensus estimates, which stand at $4.0 billion in revenue and $1.86 in EPS.
BofA Securities expects the Transportation Solutions segment to have flat year-over-year revenue, reflecting weaker market growth. Meanwhile, the Communications Solutions segment is projected to experience a 10% year-over-year increase, but Industrial Solutions is predicted to decline by 2% compared to the previous year.
The analyst from BofA Securities forecasts steady operating margins for the upcoming quarterly report, projecting 20.5% for the Transportation segment, 17.6% for Communications, and 15.0% for Industrial.
The firm’s positive stance on TE Connectivity is reinforced by the company’s consistent performance in increasing the content per vehicle by an estimated 4-6% annually, which contributes to growth and profitability.
The price objective has been set at $170 based on a 21 times multiple of the estimated calendar year 2025 earnings per share, which has been raised from $7.89 to $8.10. TE Connectivity’s upcoming earnings report will be closely watched by investors to see if the company’s performance aligns with BofA Securities’ projections.
In other recent news, TE Connectivity has been the focus of various analyst updates and demonstrated strong financial performance. The company’s Q2 results showcased growth across all sectors, with a significant increase in adjusted earnings per share and a record $1.1 billion in free cash flow for the first half of the year. Despite a 6% decline in Industrial Solutions sales, the company expects year-over-year growth in the Communications segment.
Baird recently adjusted its price target on TE Connectivity shares to $162 from $165, maintaining an Outperform rating. The adjustment reflects a mixed outlook, with expectations of a similar quarter to the previous one where the company met expectations but issued lower forward guidance compared to analyst predictions.
Evercore ISI also maintained an Outperform rating for TE Connectivity, highlighting the potential benefits of divesting its medical business. The firm later increased its price target for the company’s shares from $160 to $175, citing growth prospects in AI and EV markets.
These are recent developments for TE Connectivity, and investors will be closely monitoring the company’s financial performance and strategic decisions in the future. As per the analysts’ analysis, the company is well-positioned to leverage growth trends within its core operational sectors.
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