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TechnologyTE Connectivity
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XBRL · SEC EDGAR2007–2025(19yr)| Metric | FY 2007 | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $12.6B | $14.4B | $10.3B | $12.1B | $14.3B | $13.3B | $13.3B | $13.9B | $12.2B | $12.2B | $12.2B | $14.0B | $13.4B | $12.2B | $14.9B | $16.3B | $16.0B | $15.8B | $17.3B | +8.9% |
| Gross Profit | $3.7B | $4.2B | $2.5B | $3.8B | $4.4B | $4.0B | $4.3B | $4.7B | $4.1B | $4.0B | $4.5B | $4.7B | $4.4B | $3.7B | $4.9B | $5.2B | $5.1B | $5.5B | $6.1B | +11.4% |
| Gross Margin | 29.6% | 29.0% | 24.7% | 31.3% | 30.9% | 30.5% | 32.6% | 33.7% | 33.4% | 33.0% | 36.5% | 33.9% | 32.7% | 30.7% | 32.7% | 32.2% | 31.5% | 34.4% | 35.2% | +0.8pp |
| Operating Income | $655.0M | $1.7B | -$3.5B | $1.5B | $1.7B | $1.5B | $1.6B | $2.0B | $1.7B | $1.9B | $2.0B | $2.3B | $2.0B | $537.0M | $2.4B | $2.8B | $2.3B | $2.8B | $3.2B | +14.8% |
| Operating Margin | 5.2% | 11.6% | -33.9% | 12.6% | 12.2% | 11.4% | 11.7% | 14.7% | 14.3% | 15.5% | 16.8% | 16.7% | 14.7% | 4.4% | 16.3% | 16.9% | 14.4% | 17.6% | 18.6% | +1.0pp |
| Net Income | -$554.0M | $1.8B | -$3.3B | $1.1B | $1.3B | $1.1B | $1.3B | $1.8B | $2.4B | $2.0B | $1.7B | $2.6B | $1.8B | -$241.0M | $2.3B | $2.4B | $1.9B | $3.2B | $1.8B | -42.3% |
| Net Margin | -4.4% | 12.4% | -31.7% | 9.1% | 8.7% | 8.4% | 9.6% | 12.8% | 19.8% | 16.4% | 13.8% | 18.3% | 13.7% | -2.0% | 15.2% | 14.9% | 11.9% | 20.2% | 10.7% | -9.5pp |
| Free Cash Flow | $662.0M | $379.0M | $1.0B | $1.3B | $1.2B | $1.4B | $1.4B | $1.4B | $1.3B | $1.3B | $1.6B | $1.5B | $1.7B | $1.4B | $2.0B | $1.7B | $2.4B | $2.8B | $3.2B | +14.5% |
| FCF Margin | 5.3% | 2.6% | 9.8% | 10.7% | 8.4% | 10.6% | 10.8% | 10.1% | 10.7% | 10.6% | 13.3% | 10.8% | 12.4% | 11.8% | 13.3% | 10.4% | 15.0% | 17.7% | 18.6% | +0.9pp |
| EPS (Diluted) | $-1.11 | $3.67 | $-7.09 | $2.41 | $2.81 | $2.59 | $3.02 | $4.27 | $5.89 | $5.44 | $4.70 | $7.27 | $5.42 | $-0.73 | $6.79 | $7.47 | $6.03 | $10.33 | $6.16 | -40.4% |
1. THE BIG PICTURE
TE Connectivity is currently outrunning its reputation as a cyclical automotive supplier by positioning itself as a primary beneficiary of the global transition toward artificial intelligence and energy grid hardening. While TE Connectivity still relies on the transportation sector for 41% of its sales, its recent performance suggests that its "Industrial Solutions" segment—specifically its data and power connectivity for AI applications—is now the primary engine of growth and margin expansion.
2. WHERE THE RISKS HIT HARDEST
TE Connectivity’s stated strength of having a "global geographic presence" (10-K Item 1) is directly threatened by its lack of a foreign currency hedging strategy. Because 60% of net sales are invoiced in non-U.S. currencies, the very global footprint intended to reduce regional risk instead creates a structural vulnerability where a strong dollar consistently erodes reported revenue (Risks). Furthermore, TE Connectivity’s "close working relationships" with customers (10-K Item 1) are tested in the automotive sector, where large manufacturers exert "intense price pressure" that can negate the engineering advantages TE Connectivity claims to possess (Risks).
3. WHAT THE NUMBERS SAY TOGETHER
(XBRL) The financial data reveals a sharp acceleration in growth that is not yet reflected in TE Connectivity's long-term averages. While TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth stands at 8.9% (Peer Benchmarking), the most recent quarter saw a 21.7% surge to $4.67 billion (10-Q). This divergence is driven by a 38.2% jump in Industrial Solutions, fueled by the Richards Manufacturing acquisition and "investments in data and power connectivity in key applications such as AI" (8-K).
Despite this top-line momentum, TE Connectivity operates with a leaner margin profile than its semiconductor and specialized instrument peers. Its gross margin of 35.8% and net margin of 11.2% rank near the bottom of its peer group (Peer Benchmarking). However, TE Connectivity is highly efficient at returning capital, leading its peers with a 2.2% buyback yield, supported by a 15.5% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin (XBRL).
4. IS IT WORTH IT AT THIS PRICE?
At a 16.5x forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, TE Connectivity is attractively valued, trading at a 38% discount to the peer median of 26.7x (Peer Benchmarking). (CAPM analysis) indicates the market is pricing in roughly 5.3% long-term growth. This appears conservative given TE Connectivity's recent 21.7% quarterly revenue growth and its 8.9% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter growth rate.
The valuation discount is likely a reflection of TE Connectivity's lower gross margins (35.8%) compared to peers like Keysight (62.3%) and NXP (55.6%), which have structurally different business models. However, if TE Connectivity continues to deliver earnings growth exceeding 30%—as it did in the most recent quarter (8-K)—the current multiple leaves significant room for appreciation. The primary risk that could force a lower multiple is TE Connectivity's 25% revenue exposure to China, where geopolitical trade barriers could abruptly disrupt its 19 manufacturing sites (Risks).
5. WHAT WOULD CHANGE THIS VIEW?
- Constructive if Industrial Solutions maintains organic growth above 20% for consecutive quarters, proving the AI data center tailwind is a multi-year structural shift rather than a short-term spike.
- Cautious if the U.S. dollar continues to strengthen significantly, as the unhedged 60% of non-U.S. sales will create an "earnings drag" that offsets operational gains.
- Cautious if restructuring charges, which are expected to reach $100 million in fiscal 2026 (10-Q), fail to result in the expected 1.0pp operating margin expansion.
6. BOTTOM LINE
Structural Advantage: Massive engineering scale in harsh-environment connectivity and a dominant 2.2% buyback yield that outpaces all direct peers.
Bottom Line: TE Connectivity is a high-growth industrial play disguised as a cyclical auto supplier, offering an attractive entry point for those willing to stomach China-related geopolitical risk.
1. Top 5 Material Risks
- Macroeconomic and Cyclical Sensitivity: TE Connectivity is highly dependent on end-market demand, particularly in the automotive sector. Economic downturns, inflation, and credit market disruptions can lead customers to cancel or delay purchases, directly impacting cash flows and results of operations.
- Foreign Currency Exposure: With 60% of fiscal 2025 net sales invoiced in non-U.S. dollar currencies and no hedging strategy in place, a strengthening U.S. dollar consistently reduces reported revenue and income.
- Geopolitical and Regional Concentration (China): TE Connectivity maintains 19 principal manufacturing sites in China and generates 25% of its net sales there. This creates exposure to evolving legal systems, trade tensions, and potential tariffs between the U.S. and China.
- Automotive Industry Dependence: Accounting for 41% of net sales, the automotive market is dominated by large manufacturers capable of exerting significant price pressure, which threatens margins and profitability.
- Technological Disruption: The rapid pace of change in fields like AI, robotics, and sensor technology requires constant innovation. Failure to anticipate these shifts or introduce new products in a timely manner risks loss of market share and reduced margins.
2. Company-Specific Risks
- Pension Plan Volatility: Market fluctuations in fixed income and equity securities can reduce the value of pension plan assets, potentially requiring TE Connectivity to significantly increase funding obligations.
- Product Life Cycle and Obsolescence: Certain products have very short life cycles relative to their development time, creating a risk that TE Connectivity may need to write off excess or obsolete inventory and equipment if development costs cannot be recovered.
- Product Liability and Recalls: TE Connectivity faces potential material costs from warranty claims, product liability, and recall campaigns if products fail to perform as expected, which could also damage its reputation and future business prospects.
- Acquisition Integration: TE Connectivity pursues a growth strategy through acquisitions, but faces risks related to the successful integration of operations, manufacturing facilities, and technology, as well as the potential for dilutive financing.
3. Regulatory/Legal Risks
- Global Minimum Tax: Over 50 countries have enacted a 15% global minimum tax, with Ireland implementing rules effective in fiscal 2025. This structural change may increase cash taxes and the worldwide effective corporate tax rate.
- Environmental and Climate Regulations: TE Connectivity is subject to stringent laws regarding hazardous materials (e.g., EU RoHS, REACH, and China RoHS) and GHG emissions. Compliance requires ongoing capital expenditures and creates risks of fines, facility closures, or limitations on product sales.
- Anti-Bribery Laws: Operating in regions with varying levels of governmental corruption exposes TE Connectivity to risks under the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, where violations could lead to significant disruptions and financial penalties.
- Irish Corporate Law: As an Irish company, TE Connectivity is subject to the Irish Companies Act 2014, which limits shareholder rights compared to U.S. corporations, particularly regarding personal rights of action against directors and officers.
4. Financial Impact Map
Foreign Currency Exchange Rates → Net Sales and Income → 60% of fiscal 2025 net sales are invoiced in non-U.S. dollar currencies; no hedging is utilized.
Automotive Industry Cyclicality → Net Sales and Profitability → 41% of fiscal 2025 net sales are derived from the automotive end market.
China Operations Exposure → Net Sales and Operating Results → 25% of fiscal 2025 net sales are to customers in China; 19 principal manufacturing sites are located there.
Price Erosion → Gross Margin → Historically experienced price erosion averaging 1% to 2% annually, requiring equivalent cost reductions to maintain margins.
Pension Plan Asset Value → Results of Operations and Cash Flows → Volatility in securities prices may necessitate increased funding of pension obligations.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-Q | Jan 2026 | Dec 2025 |
| 8-K | Jan 2026 | — |
| 14A | Jan 2026 | — |
| 10-K | Nov 2025 | Sep 2025 |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
TE Connectivity Q2 results beat estimates, raises forward sales and earnings guidance
- ▸Q2 earnings and sales beat analyst expectations
- ▸Raised forward guidance for sales and earnings growth
- ▸Market narrative estimates fair value at $272 per share
- ▸Stock trading at $206.94, 11.27% decline year-to-date
- ▸Growth driven by grid hardening, renewable energy, and AI demand
TE Connectivity raises quarterly dividend 10% to $0.78, expands share buyback by $3B
- ▸Quarterly dividend increased 10% to $0.78 per share
- ▸Share repurchase authorization expanded by $3B
- ▸Company targets double-digit EPS growth and >100% free cash flow conversion
- ▸Current share price $195.84 vs $272.00 analyst fair value estimate
- ▸Year-to-date share price return reflects 16% decline
TE Connectivity raises quarterly dividend 10% to $0.78, expands share buyback by $3B
- ▸Quarterly cash dividend increased 10% to $0.78 per share
- ▸Share repurchase authorization expanded by $3.00 billion to $22.25 billion total
- ▸Q1 FY2026 revenue $4.67 billion, +22% YoY
- ▸Q1 FY2026 record orders reached $5.1 billion
- ▸Projected 2028 revenue $20.3 billion with $3.1 billion earnings
TE Connectivity Q1 FY2026 Results Show Revenue and Order Growth Driven by AI Demand
- ▸Q1 FY2026 revenue and order growth driven by AI data center connectivity
- ▸Strong performance in industrial solutions portfolio supporting automation and electrification
- ▸Achieved 2025 corporate responsibility goals early, focusing on renewable energy sourcing
- ▸Trading at $199.41 with 38% upside to consensus analyst target of $275
- ▸Significant insider selling reported over the past three months
TE Connectivity raises quarterly dividend 10% to $0.78, adds $3B to buyback program
- ▸Quarterly cash dividend increased 10% to $0.78 per share
- ▸Dividend payable June 12, 2026, to shareholders of record May 22, 2026
- ▸Board authorized $3.0 billion increase to share repurchase program
- ▸Shareholders reelected all 13 board members at annual general meeting
TE Connectivity raises quarterly dividend 10% to $0.78, adds $3B to buyback program
- ▸Quarterly cash dividend increased 10% to $0.78 per share
- ▸Board authorized $3.0 billion increase in share repurchase program
- ▸Dividend payable June 12, 2026, to shareholders of record May 22, 2026
- ▸Shareholders reelected all 13 board members at annual general meeting