TE Connectivity Ltd. (TEL)
Valuation Overview•Is TE Connectivity Ltd. Overvalued or Undervalued?
Trading at a discount compared to peers, but the underlying intrinsic cash flows struggle to support the current price.
Moderate quality score of 63/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Solid fundamental quality, though growth presents a headwind.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. This is paired with healthy capital returns, driven predominantly by aggressive share repurchases.
TEL demonstrates strong business quality with robust profitability and healthy margins. This is paired with a moderately leveraged but stable balance sheet.
The company exhibits steady, low-single-digit revenue growth however, earnings have severely contracted over the same period. The company maintains healthy operational efficiency with a 19.3% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $4.7B | +7.9% | +1.6% | +7.0% | +3.4% | |
| EBITDA | $955.0M | — | +3.5% | — | — | |
| Net Income | $855.0M | -42.3% | -8.8% | — | +3.4% | |
| EPS (Diluted) | $2.90 | -40.4% | -6.2% | — | +0.4% | |
| Free Cash Flow | $677.0M | +14.5% | +23.5% | +17.5% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 35.4% | 33.3% | 32.7% | 32.3% |
| Operating Margin | 19.3% | 17.8% | 17.7% | 16.9% |
| Net Margin | 15.7% | 14.3% | 14.6% | 13.3% |
| FCF Margin | 18.3% | 17.1% | 15.0% | 13.3% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $2.69 | $2.73 | +1.5% | ||
| Q1'26 | $2.55 | $2.72 | +6.7% | ||
| Q4'25 | $2.29 | $2.44 | +6.6% | ||
| Q3'25 | $2.08 | $2.27 | +9.1% | ||
| Q2'25 | $1.96 | $2.10 | +7.1% | ||
| Q1'25 | $1.89 | $1.95 | +3.2% | ||
| Q4'24 | $1.94 | $1.95 | +0.5% | ||
| Q3'24 | $1.86 | $1.91 | +2.7% |
Total return is +34.7% (1Y), outperforming the benchmark by +9.7%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -6.0% | -15.3% | — |
| 1Y | +34.7% | +9.7% | +1.8% |
| 3YCAGR | +18.6% | -1.9% | +5.9% |
| 5YCAGR | +12.2% | -1.6% | +9.5% |
| 10YCAGR | +14.5% | +0.8% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about TE Connectivity Ltd. (TEL) valuation, health, and returns.
TE Connectivity Ltd. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. overvalued (implying -22.3% downside from DCF intrinsic value of $169.03)
TE Connectivity Ltd. has multiple valuation anchors: DCF Intrinsic Value: $169.03 | Peer Relative Fair Value: $325.14 | Wall Street Analyst Target: $262.29 (implying +20.5% upside). A convergence of these signals offers higher conviction.
TE Connectivity Ltd. displays good financial health with a composite quality score of 63/100, supported by a Altman Z-Score of 4.8 (safe zone), Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 14.1%.
TE Connectivity Ltd. pays a 1.2% dividend yield, covered by a 44% payout ratio with 15 years of growth, supplemented by a 2.1% buyback yield.
TE Connectivity Ltd.'s current growth trajectory is Accelerating. The company achieved +7.9% 1Y revenue growth and -40.4% 1Y EPS growth, compared to its 3Y revenue CAGR of +1.6%.
Wall Street consensus is Buy based on 29 analysts, beating EPS expectations in 100% of recent quarters with a 40-quarter streak. The consensus price target represents a +20.5% change from current levels.
Investment risks for TE Connectivity Ltd. include: -21.3% 1-year max drawdown, high beta (1.60x market volatility). Volatility risk is characterized by a beta of 1.60x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.