Zacks Investment Research Downgrades TE Connectivity (TEL) to Hold

Zacks Investment Research lowered shares of TE Connectivity (NYSE:TEL) from a buy rating to a hold rating in a research report released on Wednesday morning.

According to Zacks, “TE Connectivity has a striking earnings surprise history over the four trailing quarters, beating estimates all through. Strong progress on strategic priorities, solid execution and impressive top-line growth are proving conducive to the company’s profitability. The company expects transportation business to experience high-single-digit organic growth, fueled by rise in global auto production and impressive heavy truck business in key end markets. Also, its Communications and Industrial segments are witnessing strong rebound, thus stoking growth. However, sluggish industrial markets and derivative impact of lower oil prices are posing as major headwinds, thwarting growth. Also, adverse currency fluctuations and high restructuring expenses might hurt the company’s performance. The stock has also underperformed the industry average over the past year. The company is currently experiencing inefficiencies in its supply chain.”

Several other equities analysts have also commented on the stock. Royal Bank of Canada restated a buy rating and issued a $95.00 price objective (up from $90.00) on shares of TE Connectivity in a report on Monday, October 30th. Stifel Nicolaus restated a buy rating and issued a $98.00 price objective on shares of TE Connectivity in a report on Friday, November 3rd. Cowen restated an outperform rating and issued a $110.00 price objective (up from $95.00) on shares of TE Connectivity in a report on Thursday, December 7th. Wells Fargo & Co started coverage on shares of TE Connectivity in a report on Friday, November 10th. They issued an outperform rating and a $105.00 price objective on the stock. Finally, Morgan Stanley upped their price objective on shares of TE Connectivity from $97.00 to $102.00 and gave the stock an overweight rating in a report on Wednesday, December 13th. One equities research analyst has rated the stock with a sell rating, three have assigned a hold rating and twelve have assigned a buy rating to the stock. TE Connectivity currently has a consensus rating of Buy and a consensus target price of $159.38.

Shares of TE Connectivity (NYSE TEL) traded up $0.91 during mid-day trading on Wednesday, hitting $100.17. 1,493,342 shares of the stock traded hands, compared to its average volume of 1,358,008. The company has a debt-to-equity ratio of 0.37, a quick ratio of 1.07 and a current ratio of 1.54. TE Connectivity has a 52-week low of $67.80 and a 52-week high of $100.70. The firm has a market cap of $35,223.48, a price-to-earnings ratio of 21.27, a P/E/G ratio of 1.74 and a beta of 1.08.

TE Connectivity (NYSE:TEL) last issued its quarterly earnings data on Wednesday, November 1st. The electronics maker reported $1.25 EPS for the quarter, topping the consensus estimate of $1.16 by $0.09. TE Connectivity had a net margin of 12.84% and a return on equity of 18.97%. The firm had revenue of $3.46 billion for the quarter, compared to analyst estimates of $3.28 billion. During the same period in the prior year, the business posted $1.22 EPS. The business’s revenue for the quarter was up 3.7% compared to the same quarter last year. analysts forecast that TE Connectivity will post 5.27 EPS for the current fiscal year.

TE Connectivity announced that its Board of Directors has authorized a stock repurchase program on Friday, December 8th that allows the company to buyback $1.50 billion in outstanding shares. This buyback authorization allows the electronics maker to purchase shares of its stock through open market purchases. Shares buyback programs are generally an indication that the company’s leadership believes its shares are undervalued.

In related news, insider Thomas J. Lynch sold 130,617 shares of the company’s stock in a transaction that occurred on Wednesday, November 1st. The shares were sold at an average price of $91.29, for a total transaction of $11,924,025.93. Following the sale, the insider now directly owns 429,500 shares of the company’s stock, valued at approximately $39,209,055. The sale was disclosed in a legal filing with the SEC, which is available through this link. Also, CFO Heath A. Mitts sold 10,736 shares of the company’s stock in a transaction that occurred on Wednesday, November 8th. The stock was sold at an average price of $93.14, for a total transaction of $999,951.04. The disclosure for this sale can be found here. Over the last ninety days, insiders have sold 705,373 shares of company stock worth $65,870,755. 1.30% of the stock is owned by insiders.

Several large investors have recently made changes to their positions in the business. Rockland Trust Co. purchased a new stake in shares of TE Connectivity in the 4th quarter valued at approximately $213,000. First Citizens Bank & Trust Co. increased its position in shares of TE Connectivity by 64.7% in the 4th quarter. First Citizens Bank & Trust Co. now owns 28,662 shares of the electronics maker’s stock valued at $2,724,000 after purchasing an additional 11,263 shares during the last quarter. Sit Investment Associates Inc. increased its position in shares of TE Connectivity by 69.2% in the 4th quarter. Sit Investment Associates Inc. now owns 141,700 shares of the electronics maker’s stock valued at $13,467,000 after purchasing an additional 57,975 shares during the last quarter. Atlantic Trust Group LLC increased its position in shares of TE Connectivity by 0.4% in the 3rd quarter. Atlantic Trust Group LLC now owns 178,475 shares of the electronics maker’s stock valued at $14,824,000 after purchasing an additional 690 shares during the last quarter. Finally, Parametric Portfolio Associates LLC increased its position in shares of TE Connectivity by 12.2% in the 3rd quarter. Parametric Portfolio Associates LLC now owns 542,983 shares of the electronics maker’s stock valued at $45,100,000 after purchasing an additional 59,093 shares during the last quarter. 90.02% of the stock is currently owned by institutional investors.

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About TE Connectivity

TE Connectivity Ltd. is a technology company. The Company designs and manufactures connectivity and sensors solutions. It operates through three segments: Transportation Solutions, Industrial Solutions and Communications Solutions. The Transportation Solutions segment offers connectivity and sensor technologies.

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