Value
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.4 |
| P/S | 8.2 |
| EV/EBITDA | 3.9 |
| Fwd P/E | 7.8 |
| PEG | 7.5 |
| Analyst target | 7.5 |
- ▸Forward P/E: 15.7x
- ▸PEG: 0.91
- ▸Attractively valued
TEL · Why this verdict
Why TE Connectivity (TEL) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
TE Connectivity earns a wide economic moat designation, holds the maximum Piotroski financial health score of 9 out of 9, has beaten earnings estimates in all four of the last four quarters, and trades at an attractive price-to-earnings growth ratio of 0.99 — though the stock is below its 200-day moving average and current upside to the analyst target is limited to approximately 9.7%.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
TE Connectivity holds a wide economic moat rating, earns 16% net margins with a return on equity of 7.6 from the quality composite, and achieves compounder-quality status — combining durable competitive advantages with consistent capital returns — placing it in the upper tier of electronic components peers. Quality breakdown | Net margins remain above 14% and the moat score stays above 7.0 over the next four reported quarters. | →Stable |
| CounterFree cash flow represents only 80% of net income — flagged as an earnings quality warning — suggesting some divergence between GAAP profits and actual cash generation that could reflect working capital build or capital expenditure requirements to sustain the moat. | ||
TE Connectivity achieves a Piotroski financial health score of 9 out of 9 and has beaten earnings estimates in all four of the last four quarters with an average positive surprise of 9.5%, demonstrating both balance sheet strength and consistent operational outperformance relative to analyst expectations. Earnings | Piotroski score stays at 8 or above and earnings surprise remains above 5% in at least 3 of the next 4 quarters. | →Stable |
| CounterThe beat magnitude at 9.5% average is solid but not extraordinary; a price-to-earnings growth ratio of 0.99 approaching 1.0 suggests the valuation is not deeply discounted relative to the growth on offer. | ||
Analysts rate TE Connectivity with an average rating of 7.5 out of 10 and see 22% upside to their consensus price target, with a structured analyst note generating a positive incremental signal — reflecting broad institutional confidence in the company's industrial and automotive connectivity platform. Sentiment breakdown | Analyst consensus price target rises above $260, more than 20% above the current $216.14, within 12 months following continued earnings delivery. | →Stable |
| CounterThe near-term measured upside to the immediate take-profit target is only 9.7%, with the asymmetry ratio at 0.91 below the minimum 1.5 threshold — meaning the near-term price setup is not compelling even if the longer-term analyst thesis is intact. | ||
The stock is below its 200-day moving average — though the moving average itself is still rising at 0.6% per month, indicating a pullback within an uptrend rather than a confirmed long-term downtrend — which creates a near-term technical headwind for price recovery. Momentum breakdown | The stock price rises back above the 200-day moving average within 60 days, restoring the technical uptrend confirmation. | →Stable |
| CounterA declining stock within a still-rising 200-day moving average is a common pullback pattern in uptrending industrial stocks; volume accumulation with rising on-balance volume suggests buyers are active at current levels. | ||
TE Connectivity holds a wide economic moat rating, earns 16% net margins with a return on equity of 7.6 from the quality composite, and achieves compounder-quality status — combining durable competitive advantages with consistent capital returns — placing it in the upper tier of electronic components peers.
→StableQuality breakdown
- Expectation
- Net margins remain above 14% and the moat score stays above 7.0 over the next four reported quarters.
CounterFree cash flow represents only 80% of net income — flagged as an earnings quality warning — suggesting some divergence between GAAP profits and actual cash generation that could reflect working capital build or capital expenditure requirements to sustain the moat.
TE Connectivity achieves a Piotroski financial health score of 9 out of 9 and has beaten earnings estimates in all four of the last four quarters with an average positive surprise of 9.5%, demonstrating both balance sheet strength and consistent operational outperformance relative to analyst expectations.
→StableEarnings
- Expectation
- Piotroski score stays at 8 or above and earnings surprise remains above 5% in at least 3 of the next 4 quarters.
CounterThe beat magnitude at 9.5% average is solid but not extraordinary; a price-to-earnings growth ratio of 0.99 approaching 1.0 suggests the valuation is not deeply discounted relative to the growth on offer.
Analysts rate TE Connectivity with an average rating of 7.5 out of 10 and see 22% upside to their consensus price target, with a structured analyst note generating a positive incremental signal — reflecting broad institutional confidence in the company's industrial and automotive connectivity platform.
→StableSentiment breakdown
- Expectation
- Analyst consensus price target rises above $260, more than 20% above the current $216.14, within 12 months following continued earnings delivery.
CounterThe near-term measured upside to the immediate take-profit target is only 9.7%, with the asymmetry ratio at 0.91 below the minimum 1.5 threshold — meaning the near-term price setup is not compelling even if the longer-term analyst thesis is intact.
The stock is below its 200-day moving average — though the moving average itself is still rising at 0.6% per month, indicating a pullback within an uptrend rather than a confirmed long-term downtrend — which creates a near-term technical headwind for price recovery.
→StableMomentum breakdown
- Expectation
- The stock price rises back above the 200-day moving average within 60 days, restoring the technical uptrend confirmation.
CounterA declining stock within a still-rising 200-day moving average is a common pullback pattern in uptrending industrial stocks; volume accumulation with rising on-balance volume suggests buyers are active at current levels.
Per-dimension breakdown
Quality
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.6 |
| ROA | 6.4 |
| Gross margin | 3.2 |
| Op margin | 8.1 |
| Net margin | 7.8 |
| Current ratio | 6.7 |
| FCF quality | 6.0 |
| Moat | 7.5 |
| Piotroski F | 10.0 |
- ▸Strong margins: 16%
- ▸Earnings quality warning: 80% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
6.1/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 6.1 |
Momentum
1.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+0.4%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.7 |
| Analyst rating | 7.5 |
| Price target | 8.5 |
- ▸Analyst upside: 28%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $6,140,674 (0.011% of mkt cap)
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.4 |
| quality rank | 8.3 |
| growth rank | 3.3 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.0 |
| support resistance | 7.1 |
| 52w position | 6.2 |
| gap | 5.0 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.6 |
| days to cover | 8.3 |
| volatility | 1.9 |
| put call | 0.9 |
| implied vol | 4.6 |
| max pain risk | 7.0 |
| beta | 6.3 |
| debt equity | 8.2 |
| news risk | 5.0 |
- ▸Elevated put/call: 1.86
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.4 |
| dividend safety | 5.2 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 150.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- ASYMMETRY:1.8>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:27d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:1.3<4.5
Warning (0)
none
Reward-to-Risk
1.84
Upside
+15.6%
Downside
8.5%
Sizing output
AVOID
SetupFALLING_KNIFE — Death cross, below all MAs, RSI 39, MACD bearish
EdgeCATALYST — Earnings in 27d with 4/4 beat streak
SuitabilityMODERATE — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: ASYMMETRY:1.8>=1.5. Top dim: Sentiment at 7.2; weakest: Momentum at 1.3. No conviction either direction.
The strongest dimensions are Sentiment at 7.2, Value at 7.0, and Quality at 7.0; the weakest are Momentum at 1.3, Peer rank at 4.8, and Insider at 5.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 1.84 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1TE Connectivity holds a wide economic moat rating, earns 16% net margins with a return on equity of 7.6 from the quality composite, and achieves compounder-quality status — combining durable competitive advantages with consistent capital returns — placing it in the upper tier of electronic components peers.
Trip ifNet margins drop below 12% in any reported quarter, more than 4 percentage points below the current 16% level.
- P2TE Connectivity achieves a Piotroski financial health score of 9 out of 9 and has beaten earnings estimates in all four of the last four quarters with an average positive surprise of 9.5%, demonstrating both balance sheet strength and consistent operational outperformance relative to analyst expectations.
Trip ifEarnings surprise falls below 0% in at least 3 of the next 4 quarters, ending the consistent beat pattern.
- P3Analysts rate TE Connectivity with an average rating of 7.5 out of 10 and see 22% upside to their consensus price target, with a structured analyst note generating a positive incremental signal — reflecting broad institutional confidence in the company's industrial and automotive connectivity platform.
Trip ifAnalyst consensus price target falls below $195, more than 10% below the current target of $237.13, signaling downward estimate revisions.
- P4The stock is below its 200-day moving average — though the moving average itself is still rising at 0.6% per month, indicating a pullback within an uptrend rather than a confirmed long-term downtrend — which creates a near-term technical headwind for price recovery.
Trip ifThe 200-day moving average slope turns negative and the stock remains below the moving average for more than 90 days.