Value
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.6 |
| P/S | 8.3 |
| EV/EBITDA | 4.4 |
| Fwd P/E | 7.9 |
| PEG | 7.5 |
| Analyst target | 6.0 |
- ▸Forward P/E: 15.4x
- ▸PEG: 0.92
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.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictHOLD
Overall score6.3/10
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. | ↑Improving |
| 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. | ↓Deteriorating |
| 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.
↑ImprovingEarnings
- 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.
↓DeterioratingMomentum 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
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.8 |
| ROA | 6.5 |
| Gross margin | 3.2 |
| Op margin | 8.3 |
| Net margin | 7.8 |
| Current ratio | 6.6 |
| FCF quality | 6.0 |
| Moat | 7.5 |
| Piotroski F | 10.0 |
- ▸Strong margins: 16%
- ▸Earnings quality warning: 79% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
5.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.9 |
| EPS growth | 5.8 |
Momentum
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 4.5 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.2 |
| Analyst rating | 7.5 |
| Price target | 8.4 |
- ▸Analyst upside: 27%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $4,042,000 (0.007% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.3 |
| quality rank | 8.6 |
| growth rank | 3.8 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.3 |
| support resistance | 4.4 |
| 52w position | 6.1 |
Risk (lower is worse)
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.2 |
| days to cover | 7.3 |
| volatility | 3.6 |
| put call | 2.2 |
| implied vol | 5.3 |
| max pain risk | 7.0 |
| debt equity | 8.3 |
| news risk | 5.0 |
- ▸Elevated put/call: 1.67
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.7 |
| dividend safety | 6.8 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- ASYMMETRY:2.0>=1.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:96d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.0<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
2.02
Upside
+14.4%
Downside
7.1%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 53
EdgeNo clear edge — No clear edge identified
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:2.0>=1.5. Top dim: Insider at 7.3; weakest: Momentum at 4.0. No conviction either direction.
The strongest dimensions are Insider at 7.3, Quality at 7.1, and Sentiment at 7.0; the weakest are Momentum at 4.0, Technical at 4.6, and Growth at 5.8. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 2.02 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Wide Moat Compounder Quality
Trip ifNet margins drop below 12% in any reported quarter, more than 4 percentage points below the current 16% level.
- P2Perfect Piotroski Score And Beats
Trip ifEarnings surprise falls below 0% in at least 3 of the next 4 quarters, ending the consistent beat pattern.
- P3Positive Analyst Sentiment With Upside
Trip ifAnalyst consensus price target falls below $195, more than 10% below the current target of $237.13, signaling downward estimate revisions.
- P4Below Moving Average Technical Headwind
Trip ifThe 200-day moving average slope turns negative and the stock remains below the moving average for more than 90 days.