TE Connectivity logged a 0.0% change during today's afternoon session, and is now trading at a price of $123.94 per share. The S&P 500 index moved 1.22% and the Nasdaq posted a 2.06% change.
TE Connectivity shares moved -4.0% over the last 52 weeks, with a high of $136.48 and a low of $103.85. During this time, the stock outperformed the S&P 500 index by 7.78%. As of January 2022, the company's 50-day average price is $127.0. TE Connectivity is an American Swiss-domiciled technology company that designs and manufactures connectors and sensors for several industries, such as automotive, industrial equipment, data communication systems, aerospace, defense, medical, oil and gas, consumer electronics and energy. The large-cap Technology company is based in Schaffhausen, None. TE Connectivity has returned a 1.81% dividend yield over the last 12 months.
The Company Has a Steady Stream of Strong Cash Flows:
| 2019-09-30 | 2020-09-30 | 2021-09-30 | 2022-09-30 | |
|---|---|---|---|---|
| Revenue (MM) | $13,380 | $12,124 | $14,867 | $16,215 |
| Revenue Growth | n/a | -9.39% | 22.62% | 9.07% |
| Gross Margins | 32.84% | 30.81% | 32.87% | 32.34% |
| Gross Margins Growth | n/a | -6.18% | 6.69% | -1.61% |
| Operating Margins | 14.78% | 4.43% | 16.37% | 17.0% |
| Operating Margins Growth | n/a | -70.03% | 269.53% | 3.85% |
| Earnings Per Share | $5.5 | -$0.73 | $6.91 | $7.59 |
| EPS Growth | n/a | -113.27% | 1046.58% | 9.84% |
| Diluted Shares (MM) | 335 | 329 | 327 | 320 |
| Free Cash Flow (MM) | $1,673 | $1,432 | $1,986 | $1,700 |
| FCF Growth | n/a | -14.41% | 38.69% | -14.4% |
| Capital Expenditures (MM) | $749 | $560 | $690 | $768 |
| Net Debt / EBITDA | 1.74 | 5.19 | 1.1 | 1.39 |
TE Connectivity Is Reasonably Priced:
Compared to the Technology sector's average of 27.16, TE Connectivity has a trailing twelve month P/E ratio of 17.36 and, according to its EPS guidance of 7.66, an expected P/E ratio of 16.18. TE Connectivity's PEG ratio is 0.09 based on its 183.8% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by TE Connectivity's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 1.33, which implies that the company's shares might in fact be fairly valued.
Furthermore, TE Connectivity is likely undervalued in terms of its equity because its P/B ratio is 3.575 compared to its sector average of 6.23. The company's shares are currently trading 88.93% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 5.33 * 35.88) = $65.6
11 analysts are following TE Connectivity and have set target prices ranging from $115.0 to $160.0 per share. On average, they have given the company a rating of buy. At the current price of $123.94, TEL is trading -9.71% away from its average analyst target price of $137.27 per share, implying an analyst consensus of some upside potential for the stock.
=
