TE Connectivity (TEL US): Hold: Limited upside to valuation

研报英文原文证据摘录

TE Connectivity (TEL US): Hold: Limited upside to valuation

es it an incremental optical addressable 260.00

market. We think the in-rack copper vs fiber debate is more of a 2028 and beyond

220.00

story, though fiber is becoming a bigger and bigger part of AI design innovations.

In terms of the Transportation division (c50% of total revenue), organic revenue 180.00

07/25 01/26 07/26

growth was 5%, with organic auto growth up 3% vs declining vehicle production. Target price: 216.00

High: 249.00 Low: 195.84 Current: 200.44

Management guided auto production to be flat-to-down next year.

Source: LSEG IBES, HSBC estimates

Risk-to-reward looks balanced: As discussed in Tougher comps and limited upside

Stephen Bersey

(23 April 2026), we maintain a conservative stance on TE’s stock until we see more Head of US Technology Research

clarity on margins, AI upside, and energy. Notably, we view the current data center HSBC Securities (USA) Inc.

stephen.bersey@us.hsbc.com

opportunity as supportive rather than a clear upside beyond “existing expectations”. +1 212 525 4153

Thus, overall, we view DDN revenue as tracking at current expectations, and that Abhishek Shukla*, CFA

optical upside is weighted to FY28 and beyond. We are watching for stronger Senior Analyst, Technology

HSBC Bank Middle East Limited, DIFC

evidence that orders can translate into sustainable earnings growth. abhishek2.shukla@hsbc.com

+971 4 5093343

Valuation: Following our model adjustments, we increase our next 12-month non- Sameer Lam*

GAAP EPS estimate to USD12.33 (from USD11.68). We lower our NTM target PE Global Software Analyst

HSBC Bank plc

multiple to 17.5x (from 20x), as guidance on AI-driven growth was held and not sameer.lam@hsbc.com

raised, bringing our target price to USD216.00 (from USD234.00).