TE Connectivity
A maker of connectors: the small metal-and-plastic parts that join wires inside cars, AI servers and the power grid, plus the sensors and cable around them.
Our viewNeutral Medium conviction
The scores
The profile · 1-4
Growth3/4 ↑
Sales up 15% this year, 11% organic, but it narrows to AI and grid while cars, the largest business, have not grown in three years.
Business quality3/4 →
Qualification keeps it on designs, and margins held through weak car years, but Amphenol and optics contest the AI rack and prices face pressure.
Financial position3/4 →
Net debt under one year of operating cash, notes refinanced, and free cash flow funds buybacks and purchases; debt is real, not trivial.
Execution record3/4 →
Nine straight beats and guides met, including Q4 2026, but promised car outperformance missed in fiscal 2025, and the AI figure is leaving the page.
Per share capture4/4 →
Share count down about 2% a year as buybacks outrun stock pay, and every acquisition paid in cash.
Potential2/4 ↑
The upside rests on record orders and on AI and grid spending decided by others; orders can be cancelled, so it is expected, not committed.
Risk profile3/4 →
No customer concentration, but a fifth of sales invoiced in renminbi and a car cycle that is 37% of sales.
Valuation3/4 ↑
At 17.4 times operating profit the price needs growth near the economy's pace: the current business plus a modest plan.
Evidence quality3/4 →
Figures are filed and the market sized from outside, but the AI split, energy mix and car outperformance are management's words.
The bet · 2-3 years
Safe, little upside1.6×
If it works 1.6× · if it fails you keep about 82%.
The Verdict
We rate TE Connectivity neutral. It makes connectors, the small parts that join wires inside cars, AI servers and the power grid, and the business is solid. It has two very different halves: cars, about two fifths of sales, have not grown in three years, while data centres and the grid are growing fast on record orders. The price asks for growth near the pace of the economy, so it is fair, not cheap. As a bet it is defensive: if the AI and grid half keeps its pace, the shares could rise by about half; if it stalls, most of the money is kept.
The long caseAI data centres need more connections and more power in every rack, and TE makes the parts that carry both; that demand could keep its industrial half growing for years.
The evidence under this - 9 claims
C01facthigh confidence
TE makes connectors and the parts around them: terminals and connector systems, sensors, relays, heat-shrink tubing, wire and cable, filters and interventional medical components, in two segments, Transportation Solutions and Industrial Solutions. About 75% of sales go direct to manufacturers, and no single customer is significant.
C02facthigh confidence
Fiscal 2025 sales were $17,262M: Transportation Solutions $9,388M (54%) and Industrial Solutions $7,874M (46%). Automotive alone was $7,052M, 41% of the company.
C03facthigh confidence
Automotive sales were flat for three years: $7,038M in fiscal 2023, $7,039M in 2024 and $7,052M in 2025. In fiscal 2025 automotive organic sales were flat, with Asia-Pacific up 11.3%, Europe down 10.5% and the Americas down 5.0%.
C08facthigh confidence
Digital data networks sales were $1,162M in fiscal 2023, $1,274M in 2024 and $2,208M in 2025, and $2,234M in the first nine months of fiscal 2026 against $1,501M a year earlier (up 48.8%). June quarter sales were $813M, up 34%, 16% of TE.
C10facthigh confidence
Orders were a record $5,693M in the June 2026 quarter against $4,472M a year earlier, up 27%, a book-to-bill of 1.10. Backlog was $6,188M at fiscal 2025 year-end, and the 10-K says unfilled orders may be cancelled before shipment.
C32estimatehigh confidence
At $214.71 the market value is about $62.2B (289.5M shares) and company value about $66.6B with $4.39B of net debt: 17.4 times trailing GAAP operating profit of $3,814M, 3.4 times trailing sales of $19,322M, 21.0 times trailing GAAP EPS of $10.21 (21.9 without the tax benefit), 18.8 times this year's guided adjusted EPS of $11.44, and a 5.3% free-cash-flow yield.
derivedC18 shares times the C30 price; C17 net debt; trailing operating profit is Q4 FY2025 $916M plus nine months $2,898M (C13); trailing sales and EPS summed the same way from filed quarters; guided adjusted EPS is nine months $8.39 plus the $3.05 guide (C15); free cash flow from C16
against this
- The vendor's own figure is 18.2 times operating profit, on a larger share count and its revenue, so the multiple depends on whose inputs are used.
- Trailing GAAP operating profit carries $103M of restructuring in nine months, and trailing EPS a $0.39 tax benefit; on adjusted figures the multiples are lower, on a clean tax charge the P/E is 21.9.
C34inferencemedium confidence
At a 5.3% free-cash-flow yield, an owner wanting 9% a year needs free cash flow to grow about 3.5% a year for ever. At 17.4 times operating profit the price assumes this year's 11% organic growth fades toward the pace of the economy, not that AI and grid growth carries on.
derivedC32's free-cash-flow yield of 5.3% on $3,325M; a 9% required return is an assumption, and yield plus growth equals required return in a steady state. The operating-profit multiple is read against C15's growth
against this
- This year's free cash flow sits at a cyclical high on an AI and grid boom (C08, C11); if it falls back, the same price needs more growth, not less.
- Automotive, 37% of sales, has not grown in three years (C03), so 3.5% for ever is not free either.
C41facthigh confidence
Over the twelve months to June 2026 Industrial Solutions had sales of $9,440M and GAAP operating income of $1,901M (20.1%), and Transportation Solutions $9,882M and $1,913M (19.4%); the two segments' operating income sums to the company's $3,814M, with no unallocated corporate line.
C42facthigh confidence
Industrial Solutions sales rose 28.3% in the nine months to June 2026: 21.2% organic, 2.2% currency and $272M (4.9 points) from acquisitions; in the June quarter, with Richards anniversaried, 21.9% reported and 21.0% organic. Of the quarter's $464M rise, digital data networks gave $207M, energy $132M, automation $93M, aerospace and defence $45M, and medical fell $13M.
The company
Every car, server and power line is full of wires, and every wire ends in a connector: a stamped metal contact in a plastic housing that must carry current or data for years through heat and vibration.
TE makes these, plus sensors and cable, and sells them mostly straight to the manufacturers who design them into their products. It competes in a $99.2B world market in which the hundred largest makers ship 82%. In AI server racks, its copper cables carry data between processors.
The evidence under this - 4 claims
C01facthigh confidence
TE makes connectors and the parts around them: terminals and connector systems, sensors, relays, heat-shrink tubing, wire and cable, filters and interventional medical components, in two segments, Transportation Solutions and Industrial Solutions. About 75% of sales go direct to manufacturers, and no single customer is significant.
C22facthigh confidence
Bishop & Associates puts world connector sales at about $99.2B in 2025, up 14.7%, with telecom and datacom the largest end market and automotive second; the top 100 makers shipped 82.1% of it, and Carlisle Interconnect and CommScope were absorbed by rivals.
C24facthigh confidence
The SAE/USCAR-2 standard sets performance testing for automotive terminals and connectors at every phase of development, production and field analysis, so a car connector is qualified to the carmaker's test regime before it ships.
C08facthigh confidence
Digital data networks sales were $1,162M in fiscal 2023, $1,274M in 2024 and $2,208M in 2025, and $2,234M in the first nine months of fiscal 2026 against $1,501M a year earlier (up 48.8%). June quarter sales were $813M, up 34%, 16% of TE.
How it makes money
TE is paid per part, across tens of thousands of different parts. Half its sales come from cars, trucks and sensors; half from data centres, factories, aircraft, the power grid and medical devices. No single customer matters much. The parts are cheap, but they are designed in years ahead, so a won design pays out for the life of the car or server.
The evidence under this - 3 claims
C01facthigh confidence
TE makes connectors and the parts around them: terminals and connector systems, sensors, relays, heat-shrink tubing, wire and cable, filters and interventional medical components, in two segments, Transportation Solutions and Industrial Solutions. About 75% of sales go direct to manufacturers, and no single customer is significant.
C02facthigh confidence
Fiscal 2025 sales were $17,262M: Transportation Solutions $9,388M (54%) and Industrial Solutions $7,874M (46%). Automotive alone was $7,052M, 41% of the company.
C25inferencemedium confidence
TE's moat is a switching cost built on design-in: a connector specified and qualified into a vehicle platform or a server design usually stays for that design's life, so share moves at redesigns rather than on price each quarter. Its outside trace is steady automotive sales and margins through weak production years, not share gains.
derivedC24 for the qualification step, C03 for automotive sales held flat while European and American production fell, C13 for margins near 19% GAAP through the same years, C01 for buyers who are manufacturers designing the part in
against this
- TE's own 10-K says it has experienced and expects 'downward pressure on prices' and competes with thousands of companies (C26), which is not what a strong lock-in looks like.
- Flat automotive sales for three years (C03) show a defended position, not a widening one; the switching cost protects the installed base and does not win the next platform.
Where the money comes from, stream by stream
| Stream | Share of sales (FY2025) | How it earns it |
|---|---|---|
| Automotive | 40.9% | Connectors, terminals, wiring parts, relays and sensors designed into cars and qualified to carmakers' tests, sold mostly direct. |
| Digital data networks | 12.8% | High-speed copper connectors, cables and power connections inside AI and cloud servers and racks. |
| Automation and connected living | 12.4% | Connectors, relays and sensors for factory machines and household appliances. |
| Aerospace, defense and marine | 8.6% | Rugged connectors, wire and heat-shrink for aircraft, defence systems and ships. |
| Commercial transportation | 8.3% | Connectors and sensors for trucks, buses, farm and construction machinery. |
| Energy | 7.8% | Grid connectors and fittings for utilities, power into data centres and buildings, and renewable projects; includes Richards. |
| Sensors | 5.3% | Pressure, temperature and position sensors for vehicles and industrial equipment. |
| Medical | 4.0% | Components for interventional devices and other medical equipment, made for device makers. |
Who runs it
Terrence Curtin has run TE since 2017, after years as its finance chief, and Heath Mitts has run finance since 2016. Under them the share count has shrunk every year and profit margins have widened since 2023. Insiders own very little, well under 1%, and most of that is options. The yearly bonus pays on sales, operating profit and earnings per share; the long-term award pays on earnings-per-share growth against peers, half of it in options worth something only if the price rises.
The evidence under this - 4 claims
C46facthigh confidence
Terrence Curtin has been chief executive since March 2017, after serving as president from 2015, head of Industrial Solutions from 2012 and chief financial officer from 2006 to 2012; Heath Mitts has been chief financial officer since September 2016, coming from IDEX. Both sit on the board.
C44facthigh confidence
At January 8, 2026 the 18 directors and executive officers beneficially owned 1,695,476 shares, about 0.6% of the company, of which 1,359,220 were options exercisable within 60 days, so shares actually held were about 0.1%. Chief executive Terrence Curtin held 972,592, including 853,650 options; no insider held 1%. Vanguard (12.8%), T. Rowe Price (6.3%) and BlackRock (6.2%) were the holders above 5%.
C45facthigh confidence
TE's fiscal 2025 annual bonus paid 20% on adjusted EPS, 30% on revenue, 30% on adjusted operating income, with a quality-of-earnings modifier for inventory and free cash flow, and 20% on an undisclosed KPI; the corporate score was 132.4%. Long-term awards were half stock options and half PSUs on three-year EPS growth against a peer index; the fiscal 2023 PSUs vested at 136%.
against this
- Every bonus metric is an adjusted measure and the KPI levels are withheld for competitive harm, so a fifth of the bonus cannot be checked from outside.
- Some Transportation targets were set below the prior year's actuals for fiscal 2025, and no metric pays on return on capital, so the Richards and Astrodyne prices cost the plan nothing directly.
C47facthigh confidence
From fiscal 2023 to June 2026 TE bought back $946M, $1,991M, $1,356M and, in nine months of fiscal 2026, $1,348M of shares, $5.6B in all, against stock pay of $399M in fiscal 2023 to 2025; the diluted count fell from 317M to 293M. Dividends rose from $2.30 to $2.72 a share; acquisitions took $3,077M of cash in fiscal 2023 to 2025; long-term debt rose from $3,529M to $5,530M.
Why it wins, and who could beat it
Why customers come back
Carmakers test a connector through development, production and use in the field under a standard called USCAR-2 before they will build with it. Swapping it later means testing again, so the supplier usually keeps the part until the car is redesigned.
The trace shows up as staying power rather than growth: car sales held at about $7.0B a year while European and American car production fell. TE's own report still admits steady pressure on prices.
The evidence under this - 4 claims
C24facthigh confidence
The SAE/USCAR-2 standard sets performance testing for automotive terminals and connectors at every phase of development, production and field analysis, so a car connector is qualified to the carmaker's test regime before it ships.
C25inferencemedium confidence
TE's moat is a switching cost built on design-in: a connector specified and qualified into a vehicle platform or a server design usually stays for that design's life, so share moves at redesigns rather than on price each quarter. Its outside trace is steady automotive sales and margins through weak production years, not share gains.
derivedC24 for the qualification step, C03 for automotive sales held flat while European and American production fell, C13 for margins near 19% GAAP through the same years, C01 for buyers who are manufacturers designing the part in
against this
- TE's own 10-K says it has experienced and expects 'downward pressure on prices' and competes with thousands of companies (C26), which is not what a strong lock-in looks like.
- Flat automotive sales for three years (C03) show a defended position, not a widening one; the switching cost protects the installed base and does not win the next platform.
C03facthigh confidence
Automotive sales were flat for three years: $7,038M in fiscal 2023, $7,039M in 2024 and $7,052M in 2025. In fiscal 2025 automotive organic sales were flat, with Asia-Pacific up 11.3%, Europe down 10.5% and the Americas down 5.0%.
C26facthigh confidence
TE's 10-K says it competes with thousands of companies, that competition turns on breadth, innovation, price, quality, delivery and service, and that it has experienced and expects downward pressure on prices, though tariffs and costs let some businesses raise prices recently. It names Yazaki, Aptiv, Sumitomo, Sensata, Honeywell, Molex and Amphenol in Transportation, and Amphenol, Hubbell, Molex, Omron, JST and KET in Industrial.
The threat
In AI racks, Amphenol, TE's closest rival, calls itself the market leader and competes for the same designs. NVIDIA already ships switches that carry data as light rather than through copper. TE says copper stays in charge inside the rack, and its own light-based product earns little before 2028.
The evidence under this - 3 claims
C20facthigh confidence
Amphenol's own 10-K estimates worldwide sales of interconnect, cable assembly, antenna, cable and sensor products at about $500 billion in 2025, calls itself a market leader in interconnect for IT datacom including AI systems, and names TE Connectivity among its primary competitors.
C27facthigh confidence
NVIDIA's co-packaged-optics switches put the optical link inside the switch package: Quantum-X Photonics InfiniBand from 2025 and Spectrum-X Photonics Ethernet in 2026.
C28management claimmedium confidence
Management says copper stays 'the workhorse' inside the AI rack, that TE has only a limited position in the already-optical scale-out network, and that its fibre-attach optical line from the RAM Photonics purchase will bring meaningful revenue only from 2028. On the call the CEO said TE's modelling has the copper addressable market in the rack more than doubling even as optical enters, and TE is building optical products for additional market.
sourceQ3 fiscal 2026 earnings call transcriptprimaryFiscal Q4 2026 earnings call transcript (FMP), held 2026-10-28primary
against this
- Co-packaged optics already ship at the switch (C27); if optics move into the rack, the copper content TE sells there is what is replaced.
- Analysts asked about 'copper versus optical' twice on one call, so the market treats it as unresolved.
- 2026-10-28editedThe call restated the copper position against optical with a market-size claim; management's view, untested.
The rivals: APH, NVDA, APTV, ST, HON, HUBB, ITGR.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| APH | AmphenolPriced against it: Yes | Industrial Solutions (digital data networks, automation, aerospace and defence, energy, medical) | On sale | Yes |
| NVDA | NVIDIA Spectrum-X and Quantum-X Photonics co-packaged opticsPriced against it: One segment only | Industrial Solutions (digital data networks, automation, aerospace and defence, energy, medical) | On sale | One segment only |
| APTV | Aptiv Engineered Components GroupPriced against it: Yes | Transportation Solutions (automotive, commercial transportation, sensors) | On sale | Yes |
| ST | Sensata Technologies HoldingPriced against it: One segment only | - | On sale | One segment only |
| HON | Honeywell InternationalPriced against it: One segment only | - | On sale | One segment only |
| HUBB | Hubbell IncorporatedPriced against it: One segment only | - | On sale | One segment only |
| ITGR | Integer HoldingsPriced against it: One segment only | - | On sale | One segment only |
How big it could get
How big this could get
The world spent about $99.2B on connectors in 2025, up 14.7%, with data centres the biggest buyer and cars second. TE's sales are at most about 17% of that. Carmakers built 96.4 million vehicles, and TE sells about $73 of car parts for each. Data-centre power capacity is set to grow 31% in 2026.
The evidence under this - 5 claims
C22facthigh confidence
Bishop & Associates puts world connector sales at about $99.2B in 2025, up 14.7%, with telecom and datacom the largest end market and automotive second; the top 100 makers shipped 82.1% of it, and Carlisle Interconnect and CommScope were absorbed by rivals.
C23inferencemedium confidence
TE's fiscal 2025 sales of $17.26B are at most about 17% of the $99.2B world connector market; the true connector share is lower, because TE's sales also include sensors, relays, heat-shrink, wire and cable and medical parts.
derivedC02 over C22, with the product list in C01; the periods overlap by three quarters
C04facthigh confidence
World vehicle production rose 3.9%, from 92.7 million in 2024 to 96.4 million in 2025, per OICA, with Asia up and Europe slightly down.
C05inferencemedium confidence
TE's automotive sales come to about $73 per vehicle made worldwide, and in fiscal 2025 its flat organic automotive sales trailed world production growth of about 4%, against its stated aim of beating production by 4 to 6 points.
derivedC03 over C04: $7,052M divided by 96.4 million vehicles is about $73; organic automotive growth of 0% against OICA production growth of 3.9% for calendar 2025. The periods overlap by three quarters, not four.
against this
- TE measures itself against production in its own fiscal year and its own regions, and its biggest regions for cars, Europe and the Americas, produced fewer vehicles in fiscal 2025 (C03); OICA's global rise was mostly China, where TE's share is smaller.
- In the June 2026 quarter management said its China business grew 6% against production down 2% (C06), which is the claimed outperformance showing up.
C29facthigh confidence
TrendForce puts global data-centre power capacity at 122.9 GW in 2025 and 161 GW in 2026, up 31%, and expects growth above 30% in 2027.
Where the growth is coming from, business by business
Where the growth is coming from
| Business | Share of revenue | Growth: last quarter | Last half-year | Last year | Share in 3 years at its half-year rate |
|---|---|---|---|---|---|
| Industrial Solutions (digital data networks, automation, aerospace and defence, energy, medical) | 50% | +21.9% | +24.3% | - | 62% |
| Transportation Solutions (automotive, commercial transportation, sensors) | 50% | +6.7% | +5.7% | - | 38% |
| Whole company | 100% | +13.8% | +14.1% | - | 100% |
On the filed split through 2026-06-26, if each business keeps its last half-year's growth, the company grows about 15% next year and 16% in year 3, against 16.5% over the last twelve months. Industrial Solutions (digital data networks, automation, aerospace and defence, energy, medical) carries the case: it grows 24% against 6% for the rest, and would be 62% of revenue by then. A scenario, not a forecast: no business holds its rate.
How we read it: Carrying business: Industrial grows 21% organic, not the blend's 11%, led by AI data networks and grid. Three points of its 24% half-year were bought, and cars, half the company, are flat: 3 holds.
The results
The numbers
Is it growing?Steady
Sales grew 17% over the twelve months to Jun 2026, faster than the 8.9% in the year to Sep 2025.
Is it profitable?Healthy
Operating margin is 20%, up from 14% in the year to Sep 2023.
Does growth pay off?Flat
Running costs take 16¢ of each sales dollar, about where it was (16¢) in the year to Sep 2021.
Does it earn good returns?Decent
Each dollar put into the business earns 17% a year after tax, about where it was (16%) in the year to Sep 2021.
Is it making cash?Strong
It turned 17% of sales into free cash, $3.31B over the last twelve months.
Is the balance sheet safe?Light debt
It owes $4.39B more than the cash it holds, about 1.0 years of the cash its operations bring in.
Are shares being diluted?Shrinking
The share count fell 12% in 4.8 years, and pay in shares costs 0.9% of sales.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-04. Fiscal years end in September.
| Sep 2021 | Sep 2022 | Sep 2023 | Sep 2024 | Sep 2025 | 12 mo to Jun 2026 | |
|---|---|---|---|---|---|---|
| Size and growth | ||||||
| Sales | $14.9B | $16.3B | $16.0B | $15.8B | $17.3B | $19.3B |
| Sales growth | +23% | +9.1% | −1.5% | −1.2% | +8.9% | +17% |
| Profit | ||||||
| Gross margin | 33% | 32% | 32% | 34% | 35% | 36% |
| Operating margin | 16% | 17% | 14% | 18% | 19% | 20% |
| Net margin | 15% | 15% | 12% | 20% | 11% | 16% |
| What growth costs, per sales dollar | ||||||
| Research and development | 4.1% | 3.7% | 3.7% | 3.9% | 4.0% | - |
| Selling, general and admin | 10% | 9.7% | 10% | 11% | 11% | 11% |
| Pay in shares | 0.6% | 0.7% | 0.8% | 0.8% | 0.9% | 0.9% |
| Capital spending | 4.6% | 4.7% | 4.6% | 4.3% | 5.4% | 5.7% |
| Cash | ||||||
| Cash from operations | $2.68B | $2.47B | $3.13B | $3.48B | $4.14B | $4.42B |
| Free cash flow | $1.99B | $1.70B | $2.40B | $2.80B | $3.20B | $3.31B |
| Balance sheet | ||||||
| Cash and short-term investments | $1.20B | $1.09B | $1.66B | $1.32B | $1.25B | $1.24B |
| Debt | $4.09B | $4.21B | $4.21B | $4.20B | $5.69B | $5.63B |
| Net cash | −$2.89B | −$3.12B | −$2.55B | −$2.88B | −$4.44B | −$4.39B |
| Returns and shares | ||||||
| Return on capital | 16% | 16% | 13% | 17% | 11% | 17% |
| Shares (diluted) | 333M | 325M | 317M | 309M | 299M | 293M |
What growth costs
Growing does not make TE's overheads cheaper: research and selling costs rise about in step with sales. Its margin has widened anyway, because better factories and price rises let each product earn more over what it costs to make. So more sales add profit at a steady rate, not a rising one.
The evidence under this - 2 claims
C48facthigh confidence
Per sales dollar, research, development and engineering expenses were 4.5 cents in fiscal 2021, 4.4 in 2022 and 2023, 4.7 in 2024, 4.8 in 2025 and 4.8 in the year to June 2026; selling, general and administrative 10.1, 9.7, 10.4, 10.9, 10.8 and 10.9; stock pay 0.6 rising to 0.9; capital spending 4.6 rising to 5.7. The narrower research and development amount the filer tags was $612M to $699M, about 4 cents throughout.
C49inferencemedium confidence
Growth does not make TE's overheads cheaper: research and selling costs have grown in step with sales, so the widening of GAAP operating margin from 14.4% in fiscal 2023 to about 19.7% over the year to June 2026 came from gross margin, factory productivity and price, not from operating leverage on overhead.
derivedC48 for the cost lines per sales dollar; C13 and the numbers card for operating and gross margin (31.5% in fiscal 2023, 36.1% over the year to June 2026); the 10-K's segment discussion credits manufacturing productivity
against this
- Management commits to at least 30% of each extra sales dollar reaching operating profit (C39), which overhead held flat per dollar allows if gross margin holds.
- Part of the rise in engineering spend is investment in AI and grid products whose sales are growing fastest (C08, C11), so the flat ratio may hide a shift in where the money goes.
The last report (22 Jul)
Quarter ended June 2026, filed figures.
14%
Sales growth
against the same quarter a year earlier
8.8%
Growth from the quarter before
against 1.6% the quarter before that
19¢
Operating profit
per dollar of sales
In the fourth quarter of fiscal 2026, ended September 25, sales rose 12% to $5.31B and adjusted earnings per share rose 21% to $3.14, both above the company's own guide. Industrial sales grew 20%, led by the data-centre unit, up 34%. Transportation grew 8%, and car sales grew 7%, or 6% once currency is taken out.
Orders rose 29% to $6.06B, about 14% more than the company shipped. For the first quarter, management expects sales up 15%, and for fiscal 2027 growth like fiscal 2026's 12%.
What it did to the thesisIt met our test: sales, profit and orders beat the guide, the data-centre unit held its level, and cars grew. The car half is still only one quarter of growth, so we stay neutral until fiscal 2027 shows it.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $2.94 against $2.85 expected; $2.55 as filed, the gap being what the company adds back.
The evidence under this - 4 claims
C50facthigh confidence
In the September 2026 quarter (fiscal Q4) sales were a record $5,312M, up 12% reported and 13% organic; orders were $6,055M, up 29% on the year and 6% on the quarter, a book-to-bill of 1.14. Industrial Solutions sales were $2,799M, up 20% (digital data networks $949M, up 34%; energy up 12%), and its orders were up 47%; Transportation Solutions sales were $2,600M, up 8% (7% organic), with automotive $1,933M, up 7% (6% organic). Adjusted operating margin was 22.1%, adjusted EPS $3.14 (up 21%) and free cash flow about $1.2B. For fiscal 2026 sales were $19.9B, up 15% (12% organic), orders $22.2B and adjusted EPS $11.52, up 24%.
C15management claimhigh confidence
Management guides the December 2026 quarter to about $5.35B of sales (up 15%, reported and organic) and adjusted EPS of about $3.30 (up 21%; GAAP about $3.04), and says strong orders and backlog should give fiscal 2027 organic sales growth consistent with fiscal 2026's 12%. It delivered its September 2026 guide: sales of $5,312M against about $5.25B and adjusted EPS of $3.14 against about $3.05. On the 28 October call the CEO said fiscal 2027 organic growth should look similar to the 12% just delivered, with the first quarter above seasonal because Industrial Solutions is down only slightly.
sourceQ4 and fiscal 2026 results release (8-K Exhibit 99.1)primaryQ4 fiscal 2026 earnings presentation (8-K Exhibit 99.2)primaryQ3 fiscal 2026 results release (8-K Exhibit 99.1)primaryFiscal Q4 2026 earnings call transcript (FMP), held 2026-10-28primary
against this
- Adjusted EPS excludes amortisation of acquired intangibles (C14); GAAP EPS growth for the quarter is helped by a $0.20 tax item.
- The guide gives no automotive figure, and 'consistent with fiscal 2026' includes the acquisitions that added to fiscal 2026 growth.
- 2026-10-28editedthe September quarter guide was delivered (sales $5,312M, adjusted EPS $3.14); the claim now carries the first-quarter fiscal 2027 guide and the fiscal 2027 view instead
- 2026-10-28editedThe call gave the fiscal 2027 growth outlook in words the release did not.
C10facthigh confidence
Orders were a record $5,693M in the June 2026 quarter against $4,472M a year earlier, up 27%, a book-to-bill of 1.10. Backlog was $6,188M at fiscal 2025 year-end, and the 10-K says unfilled orders may be cancelled before shipment.
C08facthigh confidence
Digital data networks sales were $1,162M in fiscal 2023, $1,274M in 2024 and $2,208M in 2025, and $2,234M in the first nine months of fiscal 2026 against $1,501M a year earlier (up 48.8%). June quarter sales were $813M, up 34%, 16% of TE.
What management did with the money
It kept buying back its own shares: $1.35B in nine months, so the share count fell 1.6% since November. It also spends cash on companies: about $2.3B for a grid-connector maker last year and $1.4B agreed for a power-filter maker.
Insiders in 2026Q2: 4 purchases and 9 sales, from their Form 4 filings.
The evidence under this - 3 claims
C16facthigh confidence
Free cash flow was $3,214M in fiscal 2025 and $2,171M in the first nine months of fiscal 2026, $3,325M over the trailing twelve months. In those nine months TE bought back $1,348M of shares and paid $643M of dividends. Capital spending was $936M in fiscal 2025 and is planned at about 5% of sales.
C18facthigh confidence
Shares outstanding fell from 294,189,246 on November 6, 2025 to 289,513,228 on July 20, 2026, 1.6% in eight months; diluted shares in the June quarter were 293M against 298M a year earlier.
C19facthigh confidence
TE paid about $2.3B in cash for Richards Manufacturing, a utility-connector maker, and $321M for two smaller businesses in fiscal 2025, and agreed in July 2026 to buy Astrodyne TDI, a power-filter and power-supply maker with over $250M of sales, for about $1.4B in cash, closing by the end of 2026.
The price, and where we disagree
In short. Fair, not cheap. The price pays for the business growing about as fast as the economy, which the car half alone would roughly do.
Share price
$217.76
close,
Company value for each $1 of operating profit
18.2
rivals' middle 21.0
The price has slipped while the business grew. In April the shares fell 9.1% in a day after the data-centre unit stalled for two quarters; it then jumped in June, and the price barely moved.
TE reported on October 28 and guided the first quarter to sales up 15%. The next check is January, when we see whether orders keep beating sales and whether cars grow 4% or more.
The evidence under this - 5 claims
C21facthigh confidence
On the April 2026 call an analyst called two sequential quarters of flattish digital-data-networks sales 'a bit surprising' and noted a sequential fall in Industrial margin; the shares fell 9.1% that day, to $221.04, on a print that beat the adjusted EPS estimate.
C08facthigh confidence
Digital data networks sales were $1,162M in fiscal 2023, $1,274M in 2024 and $2,208M in 2025, and $2,234M in the first nine months of fiscal 2026 against $1,501M a year earlier (up 48.8%). June quarter sales were $813M, up 34%, 16% of TE.
C30facthigh confidence
The shares closed at $214.71 on 2026-09-28, 15% below their 52-week high and 0.1% above a year earlier. Over the same year sales per share rose 17.5% and the price paid for each dollar of sales fell 14.8%.
C15management claimhigh confidence
Management guides the December 2026 quarter to about $5.35B of sales (up 15%, reported and organic) and adjusted EPS of about $3.30 (up 21%; GAAP about $3.04), and says strong orders and backlog should give fiscal 2027 organic sales growth consistent with fiscal 2026's 12%. It delivered its September 2026 guide: sales of $5,312M against about $5.25B and adjusted EPS of $3.14 against about $3.05. On the 28 October call the CEO said fiscal 2027 organic growth should look similar to the 12% just delivered, with the first quarter above seasonal because Industrial Solutions is down only slightly.
sourceQ4 and fiscal 2026 results release (8-K Exhibit 99.1)primaryQ4 fiscal 2026 earnings presentation (8-K Exhibit 99.2)primaryQ3 fiscal 2026 results release (8-K Exhibit 99.1)primaryFiscal Q4 2026 earnings call transcript (FMP), held 2026-10-28primary
against this
- Adjusted EPS excludes amortisation of acquired intangibles (C14); GAAP EPS growth for the quarter is helped by a $0.20 tax item.
- The guide gives no automotive figure, and 'consistent with fiscal 2026' includes the acquisitions that added to fiscal 2026 growth.
- 2026-10-28editedthe September quarter guide was delivered (sales $5,312M, adjusted EPS $3.14); the claim now carries the first-quarter fiscal 2027 guide and the fiscal 2027 view instead
- 2026-10-28editedThe call gave the fiscal 2027 growth outlook in words the release did not.
C50facthigh confidence
In the September 2026 quarter (fiscal Q4) sales were a record $5,312M, up 12% reported and 13% organic; orders were $6,055M, up 29% on the year and 6% on the quarter, a book-to-bill of 1.14. Industrial Solutions sales were $2,799M, up 20% (digital data networks $949M, up 34%; energy up 12%), and its orders were up 47%; Transportation Solutions sales were $2,600M, up 8% (7% organic), with automotive $1,933M, up 7% (6% organic). Adjusted operating margin was 22.1%, adjusted EPS $3.14 (up 21%) and free cash flow about $1.2B. For fiscal 2026 sales were $19.9B, up 15% (12% organic), orders $22.2B and adjusted EPS $11.52, up 24%.
The betSafe, little upside
If it works
1.6×
from today's value, at the stated multiple
If it fails
keep 82%
of today's market value: the rest of the company and Industrial Solutions (digital data networks, automation, aerospace and defence, energy, medical) stalled at its lowest case, less debt
How we read the multiple
Counting its debt, buyers pay about 18 times last year's operating profit, the profit from the business itself. Rivals' middle is about 21.
For a buyer wanting 9% a year:
- Today's price returns 5.3% a year in spare cash, the cash left after running and investing in the business.
- The rest must come from that cash growing about 3.5% a year, for ever.
- That is roughly the pace of the economy. Growth is far faster this year, but car sales have not grown for three years.
Against its own history. About where the company has usually traded, depending on which measure you use, while its growth today is faster than usual.
The evidence under this - 5 claims
C32estimatehigh confidence
At $214.71 the market value is about $62.2B (289.5M shares) and company value about $66.6B with $4.39B of net debt: 17.4 times trailing GAAP operating profit of $3,814M, 3.4 times trailing sales of $19,322M, 21.0 times trailing GAAP EPS of $10.21 (21.9 without the tax benefit), 18.8 times this year's guided adjusted EPS of $11.44, and a 5.3% free-cash-flow yield.
derivedC18 shares times the C30 price; C17 net debt; trailing operating profit is Q4 FY2025 $916M plus nine months $2,898M (C13); trailing sales and EPS summed the same way from filed quarters; guided adjusted EPS is nine months $8.39 plus the $3.05 guide (C15); free cash flow from C16
against this
- The vendor's own figure is 18.2 times operating profit, on a larger share count and its revenue, so the multiple depends on whose inputs are used.
- Trailing GAAP operating profit carries $103M of restructuring in nine months, and trailing EPS a $0.39 tax benefit; on adjusted figures the multiples are lower, on a clean tax charge the P/E is 21.9.
C34inferencemedium confidence
At a 5.3% free-cash-flow yield, an owner wanting 9% a year needs free cash flow to grow about 3.5% a year for ever. At 17.4 times operating profit the price assumes this year's 11% organic growth fades toward the pace of the economy, not that AI and grid growth carries on.
derivedC32's free-cash-flow yield of 5.3% on $3,325M; a 9% required return is an assumption, and yield plus growth equals required return in a steady state. The operating-profit multiple is read against C15's growth
against this
- This year's free cash flow sits at a cyclical high on an AI and grid boom (C08, C11); if it falls back, the same price needs more growth, not less.
- Automotive, 37% of sales, has not grown in three years (C03), so 3.5% for ever is not free either.
C35estimatemedium confidence
If the shares traded at 17.5 times trailing GAAP earnings, the median of the vendor's prior fiscal years, company value would be about 14.7 times trailing operating profit.
derived17.5 times C32's trailing GAAP EPS of $10.21, times 289.5M shares, plus $4.39B of net debt, over $3,814M of operating profit. The prior-year median P/E is the vendor's figure in the pack
C33facthigh confidence
In the filed competitor set Amphenol trades at 28.2 times operating profit and 40.3 times earnings; Aptiv's trailing multiples (0.8 times sales) straddle its 2026 separation of Electrical Distribution Systems and describe no company that exists today.
C03facthigh confidence
Automotive sales were flat for three years: $7,038M in fiscal 2023, $7,039M in 2024 and $7,052M in 2025. In fiscal 2025 automotive organic sales were flat, with Asia-Pacific up 11.3%, Europe down 10.5% and the Americas down 5.0%.
Priced against its rivals
The competitors its own annual report names, each confirmed against the rival's filing. Measured on company value for each $1 of operating profit, cheapest first:
| Ticker | Company | company value for each $1 of operating profit |
|---|---|---|
| APTV | Aptiv | 13.8× |
| TEL | TE Connectivity | 18.2× |
| APH | Amphenol | 28.2× |
The middle of the other 2 is 21.0. TE Connectivity plc is 2nd cheapest of 3.
Rivals' figures come from a data provider, so read the spread of the group rather than any single pair.
Well below Amphenol, its closest listed rival, which sells more into AI data centres; the gap reflects the mix of the two businesses.
Also checked and set aside: Carlisle Companies Incorporated (a substitute, not the same product).
Private or foreign rivals that cannot be priced: Yazaki, Molex, Sumitomo, Omron, JST, Korea Electric Terminal (KET).
The bet: what it pays if it works
This bet is on one business only: Industrial Solutions, the half that sells into AI data centres, the power grid, factories and defence. The car half is counted separately at the price TE used to trade at, because it has barely grown in three years.
If Industrial keeps its recent pace for two more years, the stock is worth more than today but well short of double, so this is an expensive bet. If that growth stalls, the two halves together are worth somewhat less than today's price.
| Industrial Solutions (digital data networks, automation, aerospace and defence, energy, medical) operating profit in two to three years | Trailing years of Industrial Solutions needed | At the stated multiple |
|---|---|---|
| $2.94B (the big win) | about 2 at 100% kept | 1.6× |
| $3.21B | about 2 at 100% kept | 1.8× |
To pay 2× (a Fair bet) it would need about $3.79B of Industrial Solutions (digital data networks, automation, aerospace and defence, energy, medical) operating profit (about 2 trailing years of Industrial Solutions); to pay 5× (a Cheap bet), about $10.98B of Industrial Solutions (digital data networks, automation, aerospace and defence, energy, medical) operating profit (about 6 trailing years of Industrial Solutions), at the same multiple.
Each row is Industrial Solutions (digital data networks, automation, aerospace and defence, energy, medical) alone, plus the rest of the company (Transportation Solutions (automotive, commercial transportation, sensors)) counted at about $28.12B.
The steps it has to take
- Done Digital data networks grows from $1.27 billion in fiscal 2024 to $2.21 billion in fiscal 2025
- Done Richards Manufacturing bought and anniversaried; Industrial grows 21% organic in the June 2026 quarter
- In progress September 2026 quarter: about $5.25 billion of sales with book-to-bill at or above 1.0 due 2026-11-04
- In progress Astrodyne TDI closes, adding power filters to Industrial due 2026-12
- In progress AI sales pass the $3 billion target for fiscal 2027 due 2027-11
- In progress Industrial orders still growing year over year through fiscal 2027 due 2027-11
- Not started Industrial operating profit near $2.9 billion over the twelve months to mid-2028 due 2028-08
The detail behind the label
Rating
Expensive
the big win's payoff against the 2× and 5× lines
Cheap bet at about
≈ $61.33
72% below the price (close, )
The option
2.1×
what Industrial Solutions (digital data networks, automation, aerospace and defence, energy, medical) is worth if it works, against what the price pays for it
The evidence under this - 5 claims
C41facthigh confidence
Over the twelve months to June 2026 Industrial Solutions had sales of $9,440M and GAAP operating income of $1,901M (20.1%), and Transportation Solutions $9,882M and $1,913M (19.4%); the two segments' operating income sums to the company's $3,814M, with no unallocated corporate line.
C42facthigh confidence
Industrial Solutions sales rose 28.3% in the nine months to June 2026: 21.2% organic, 2.2% currency and $272M (4.9 points) from acquisitions; in the June quarter, with Richards anniversaried, 21.9% reported and 21.0% organic. Of the quarter's $464M rise, digital data networks gave $207M, energy $132M, automation $93M, aerospace and defence $45M, and medical fell $13M.
C08facthigh confidence
Digital data networks sales were $1,162M in fiscal 2023, $1,274M in 2024 and $2,208M in 2025, and $2,234M in the first nine months of fiscal 2026 against $1,501M a year earlier (up 48.8%). June quarter sales were $813M, up 34%, 16% of TE.
C10facthigh confidence
Orders were a record $5,693M in the June 2026 quarter against $4,472M a year earlier, up 27%, a book-to-bill of 1.10. Backlog was $6,188M at fiscal 2025 year-end, and the 10-K says unfilled orders may be cancelled before shipment.
C35estimatemedium confidence
If the shares traded at 17.5 times trailing GAAP earnings, the median of the vendor's prior fiscal years, company value would be about 14.7 times trailing operating profit.
derived17.5 times C32's trailing GAAP EPS of $10.21, times 289.5M shares, plus $4.39B of net debt, over $3,814M of operating profit. The prior-year median P/E is the vendor's figure in the pack
Where we disagree with the market
The market believes
A car-parts supplier with an AI side business that may fade as light replaces copper in data centres.
We believe
The AI and grid half keeps growing into 2027 on record orders, but the flat car half caps the whole company.
The market's worry shows in the numbers: analysts split evenly between buy and hold, and the price fell as sales per share rose.
Where we differ is that power and grid orders are growing too, and light cannot replace a power cable. The evidence against us would be data-centre orders falling, or car sales falling while carmakers build more.
What analysts say, and the evidence
Analysts positive
65%
of 20, 1 Sep
Four months earlier
68%
of 19, 1 May
The evidence under this - 6 claims
C31facthigh confidence
Of 29 analysts in the vendor snapshot, 14 rate the shares a buy and 15 a hold, none a sell; the monthly series shows 65% positive of 20 in September 2026 against 70% of 20 in January. The average price target of the last month sits 11.5% below the average of the past year.
C30facthigh confidence
The shares closed at $214.71 on 2026-09-28, 15% below their 52-week high and 0.1% above a year earlier. Over the same year sales per share rose 17.5% and the price paid for each dollar of sales fell 14.8%.
C28management claimmedium confidence
Management says copper stays 'the workhorse' inside the AI rack, that TE has only a limited position in the already-optical scale-out network, and that its fibre-attach optical line from the RAM Photonics purchase will bring meaningful revenue only from 2028. On the call the CEO said TE's modelling has the copper addressable market in the rack more than doubling even as optical enters, and TE is building optical products for additional market.
sourceQ3 fiscal 2026 earnings call transcriptprimaryFiscal Q4 2026 earnings call transcript (FMP), held 2026-10-28primary
against this
- Co-packaged optics already ship at the switch (C27); if optics move into the rack, the copper content TE sells there is what is replaced.
- Analysts asked about 'copper versus optical' twice on one call, so the market treats it as unresolved.
- 2026-10-28editedThe call restated the copper position against optical with a market-size claim; management's view, untested.
C11facthigh confidence
Energy sales were $516M in the June 2026 quarter, up 34% (33% organic), and $1,367M for nine months against $879M; $271M of that rise came from the Richards Manufacturing purchase, so organic growth was 21.5%.
C10facthigh confidence
Orders were a record $5,693M in the June 2026 quarter against $4,472M a year earlier, up 27%, a book-to-bill of 1.10. Backlog was $6,188M at fiscal 2025 year-end, and the 10-K says unfilled orders may be cancelled before shipment.
C03facthigh confidence
Automotive sales were flat for three years: $7,038M in fiscal 2023, $7,039M in 2024 and $7,052M in 2025. In fiscal 2025 automotive organic sales were flat, with Asia-Pacific up 11.3%, Europe down 10.5% and the Americas down 5.0%.
What could go wrong, and how we would know
The risks
- Cars are not growing. Car sales, 41% of TE, were flat for three years, and in fiscal 2025 they trailed world production.
- AI spending can turn. The data-centre boom is someone else's decision; when data-centre sales paused for two quarters, the shares fell 9.1% in a day.
- Light instead of copper. NVIDIA already ships switches that carry data as light; if that moves inside the rack, TE's copper cables lose their place.
- A stronger rival in AI. Amphenol calls itself the leader in data-centre connectors and is worth far more per dollar of profit.
- China and trade. A fifth of sales are invoiced in Chinese currency, and tariffs between the U.S. and China hit costs and customers.
The evidence under this - 6 claims
C03facthigh confidence
Automotive sales were flat for three years: $7,038M in fiscal 2023, $7,039M in 2024 and $7,052M in 2025. In fiscal 2025 automotive organic sales were flat, with Asia-Pacific up 11.3%, Europe down 10.5% and the Americas down 5.0%.
C05inferencemedium confidence
TE's automotive sales come to about $73 per vehicle made worldwide, and in fiscal 2025 its flat organic automotive sales trailed world production growth of about 4%, against its stated aim of beating production by 4 to 6 points.
derivedC03 over C04: $7,052M divided by 96.4 million vehicles is about $73; organic automotive growth of 0% against OICA production growth of 3.9% for calendar 2025. The periods overlap by three quarters, not four.
against this
- TE measures itself against production in its own fiscal year and its own regions, and its biggest regions for cars, Europe and the Americas, produced fewer vehicles in fiscal 2025 (C03); OICA's global rise was mostly China, where TE's share is smaller.
- In the June 2026 quarter management said its China business grew 6% against production down 2% (C06), which is the claimed outperformance showing up.
C21facthigh confidence
On the April 2026 call an analyst called two sequential quarters of flattish digital-data-networks sales 'a bit surprising' and noted a sequential fall in Industrial margin; the shares fell 9.1% that day, to $221.04, on a print that beat the adjusted EPS estimate.
C27facthigh confidence
NVIDIA's co-packaged-optics switches put the optical link inside the switch package: Quantum-X Photonics InfiniBand from 2025 and Spectrum-X Photonics Ethernet in 2026.
C20facthigh confidence
Amphenol's own 10-K estimates worldwide sales of interconnect, cable assembly, antenna, cable and sensor products at about $500 billion in 2025, calls itself a market leader in interconnect for IT datacom including AI systems, and names TE Connectivity among its primary competitors.
C38facthigh confidence
About 60% of fiscal 2025 sales were invoiced outside the U.S. dollar, 20% in renminbi; Asia-Pacific was 38% of sales. The 10-K names U.S.-China tariffs and trade barriers as a risk to its operations and customers in China.
What we still do not know
- How much of TE's AI sales are real. The company gives an AI figure it does not file, and says it will now report only the wider data-centre unit.
- Whether TE is winning or losing market share. The research house that ranks connector makers sells the figures, so we could not check.
- When, or whether, light moves inside the AI rack. Nobody we could reach publishes a date.
The evidence under this - 5 claims
C09management claimmedium confidence
Management says AI is about 70% or more of digital data networks, about $2.4B in fiscal 2026, and that it is ahead of a $3B target set for fiscal 2027. It says a third of its AI sales is power connection and two-thirds data, and that it will now report at the digital-data-networks level. On the call management said digital data networks revenue should rise by over $1B in fiscal 2027, about 30% of it power connectivity, with a small step in the first quarter and the bigger step in the second half.
sourceQ3 fiscal 2026 earnings call transcriptprimaryQ2 fiscal 2026 earnings call transcriptprimaryFiscal Q4 2026 earnings call transcript (FMP), held 2026-10-28primary
against this
- The AI figure is not filed or reconciled; the company said on the June 2026 call it would speak 'much more at the DDN level' from now on, so the $3B test may not be checkable.
- Digital data networks sales were flat for two quarters before June 2026, which an analyst raised in April (C21).
- 2026-10-28editedThe call sized and shaped the fiscal 2027 data-centre growth.
C22facthigh confidence
Bishop & Associates puts world connector sales at about $99.2B in 2025, up 14.7%, with telecom and datacom the largest end market and automotive second; the top 100 makers shipped 82.1% of it, and Carlisle Interconnect and CommScope were absorbed by rivals.
C23inferencemedium confidence
TE's fiscal 2025 sales of $17.26B are at most about 17% of the $99.2B world connector market; the true connector share is lower, because TE's sales also include sensors, relays, heat-shrink, wire and cable and medical parts.
derivedC02 over C22, with the product list in C01; the periods overlap by three quarters
C27facthigh confidence
NVIDIA's co-packaged-optics switches put the optical link inside the switch package: Quantum-X Photonics InfiniBand from 2025 and Spectrum-X Photonics Ethernet in 2026.
C28management claimmedium confidence
Management says copper stays 'the workhorse' inside the AI rack, that TE has only a limited position in the already-optical scale-out network, and that its fibre-attach optical line from the RAM Photonics purchase will bring meaningful revenue only from 2028. On the call the CEO said TE's modelling has the copper addressable market in the rack more than doubling even as optical enters, and TE is building optical products for additional market.
sourceQ3 fiscal 2026 earnings call transcriptprimaryFiscal Q4 2026 earnings call transcript (FMP), held 2026-10-28primary
against this
- Co-packaged optics already ship at the switch (C27); if optics move into the rack, the copper content TE sells there is what is replaced.
- Analysts asked about 'copper versus optical' twice on one call, so the market treats it as unresolved.
- 2026-10-28editedThe call restated the copper position against optical with a market-size claim; management's view, untested.
What would change our view
- Neutral→AttractiveIts own historical multiple, with orders still growing
It needs all of:
- ○The shares fall until company value is about 14.7 times operating profit, TE's usual price for its earnings.about ≈$181.39 today, 17% below the last close
- ○Orders are still at least as large as sales in that quarter.checked at the next results, due by 20 Jan
- Neutral→AttractiveThe car half grows again
It needs all of:
- ○Car sales grow 4% or more in fiscal 2027, after taking out currency and purchases.checked at the next results, due by 20 Jan
- ○Industrial orders keep growing from a year earlier through fiscal 2027.checked at the next results, due by 20 Jan
- Neutral→UnattractiveThe AI orders turn
It needs any of:
- ○Data-centre sales fall below the same quarter a year earlier.checked at the next results, due by 20 Jan
- ○Orders fall below sales for two quarters in a row.checked at the next results, due by 20 Jan
We would also be wrong if
- Operating margin, before one-off charges and amortisation, falls below 20% for a full year.
- The share count starts rising, or TE pays for a purchase in shares.
What is coming
- December 2026 Astrodyne TDI acquisition closes: Whether the $1.4B cash purchase of a power-filter maker closes on its terms, adding to the AI and grid half and to debt.
Every dated event ahead
- December 2026 Astrodyne TDI acquisition closes: Whether the $1.4B cash purchase of a power-filter maker closes on its terms, adding to the AI and grid half and to debt.
- January 2027 2027 proxy statement: The fiscal 2026 bonus score and PSU payout, and whether pay starts to reward returns on the cash spent on deals.
- 20 January 2027 Q1 fiscal 2027 results: Whether sales reach the $5.35B guide, whether automotive grows ahead of vehicle production as management promises, and whether AI and energy growth holds against harder comparisons.
Since we wrote this
Written
29 Sep
Price the thesis read
$214.71
28 Sep
Latest close
$217.76
close, · +1.4% since
- 28 OctEarningsFiscal Q4 beat the guide and TE guided up 15%; view heldSales, profit and orders beat the guide and car sales grew 6% organic. One quarter does not show the 4% car growth for fiscal 2027 our upgrade route needs, and the price barely moved.
- 5 OctThesis reviewThe bet now names what it ridesThe owner asked that every bet name the macro trend behind it, after BWXT's bet was missing its chief executive's case for nuclear over gas.
- 4 OctThesis reviewOwner's checklist: revenue streams, cost of growth, management, catalystsThe owner's checklist found the method silent on who runs the company, what growth costs, where the money comes from and what is dated ahead; this pass fills those four blocks from the proxy and filings.
- 29 SepThesis writtenNeutral, medium convictionWritten two months after the June 2026 quarter's record orders and five weeks before the fiscal 2027 outlook.
Sources 22
Where this came from
Sources - 22
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2025-11-10Item 1 business and segments, end-market shares, named competitors for both segments, backlog ($6,188M, cancellable), competition and price pressure, 93,000 employees, sales by region and currency, end-market sales FY2023-FY2025 (automotive $7,038M, $7,039M, $7,052M; digital data networks $1,162M, $1,274M, $2,208M), the automotive organic discussion by region, Richards Manufacturing, capex, 294,189,246 shares at November 6, 2025backsC01C02C03C08C10C13C16C18C19C26C38C41C43C47C48
- S02primarycompany release2025-10-29fiscal 2025 sales, GAAP EPS $6.16, adjusted EPS $8.76, free cash flow $3,214M, $2.2B returned, $2.6B of acquisitions; the change to exclude amortisation from adjusted measures from fiscal 2026backsC14C16
- S03primarycompany release2026-07-22Q3 sales, segment and end-market growth reported and organic, GAAP and adjusted operating income and EPS with reconciliation, orders $5.7B, cash flow, balance sheet, Q4 guidance, the Astrodyne TDI agreementbacksC07C11C13C14C15C16C17C18C19C47
- S04primarycompany filing2026-07-24end-market sales table, 289,513,228 shares at July 20, 2026, debt repaid and commercial paper, the new revolver, $3.0B of buyback authorisation remaining, Astrodyne funding, the Q4 outlookbacksC07C08C11C17C18C19C41C42C47C48
- S05primarytranscript2026-07-22Q3 fiscal 2026 earnings call transcriptdata/cache/transcripts/TEL-2026Q3.json (FMP earning-call-transcript, quarter label 2026Q3, call held 2026-07-22)management on the AI figure, DDN orders up over 70% year to date, auto content outperformance of four to six points, China exports, the energy mix, copper against optics and the limited scale-out position, the fiscal 2026 outlook; questions from thirteen analysts including Goldman Sachs, Evercore, UBS, Wells Fargo and Truist
We said this last quarter, the $3 billion we laid out, we're ahead of, and that has continued to shift left, and that's how you should think about it.
backsC06C09C12C28C39 - S06primarytranscript2026-04-22Q2 fiscal 2026 earnings call transcriptdata/cache/transcripts/TEL-2026Q2.json (FMP earning-call-transcript, quarter label 2026Q2, call held 2026-04-22)an analyst's objection that DDN revenue had been flat for two quarters and Industrial margin fell sequentially; management on the $150M second-half AI step-up, input-cost inflation in metals and resins, and 30% incremental flow-through
But it was a bit surprising to have 2 sequential quarters of flattish revenue performance.
backsC09C21C39 - S07secondaryvendor data2026-09-29Research pack, frozen at content/TEL/research-pack.jsoncontent/TEL/research-pack.jsonclosing price 214.71 on 2026-09-28, the 52-week range, the price-move decomposition, analyst split and grades history, target drift, FY2028 estimates, FINRA short interest, insider statistics, the filed-competitor cohort multiplesbacksC21C30C31C33C36C37
- S08primarycompany filing2026-02-11its estimate of about $500 billion of worldwide interconnect, cable assembly, antenna, cable and sensor sales in 2025; its claim to lead IT datacom interconnect; TE Connectivity named among its primary competitors; the CommScope purchasebacksC20
- S09primarycompany filing2026-02-06its Engineered Components Group sells connection systems and interconnects to carmakers, the same product and buyer as TE's automotive businessbacksC40
- S10secondaryindustry data2026-03-24Bishop & Associates World Connector Market Handbook, as reported by Connector Supplier, 24 March 2026 Bishop & Associatesworld connector market growth in 2025, telecom and datacom the largest sector and automotive second; the handbook itself is sold, so the trade press summary was read
The worldwide electronic connector market expanded by more than $12.7 billion in 2025, delivering a 14.7% increase over 2024 sales, one of the industry’s stronger performances in recent years.
backsC22 - S11secondaryindustry data2026-09-29Bishop & Associates Top 100 connector manufacturers, as reported by Connector Supplier, 29 September 2026 Bishop & Associatesthe size of the world connector market in 2025 (about $99.2 billion, the sum of the two figures), the share held by the largest hundred makers, and the acquisitions that removed Carlisle Interconnect and CommScope as standalone makers
The world’s top 100 connector manufacturers recorded shipments of $81.386 billion in 2025. This represented 82.1% of the worldwide connector market, up from 81.0% in 2024. The balance of the connector industry had shipments of $17.783 billion in 2025
backsC22 - S12primaryindustry data2026-04-23world vehicle production for calendar 2024 and 2025, measured by the carmakers' international association rather than by a supplier
Global vehicle production rose from 92.7 million units in 2024 to 96.4 million in 2025 (+3.9%), while global sales climbed from 95.3 million to 99.8 million units (+4.7%).
backsC04 - S13primaryindustry data2026-09-29SAE International - USCAR2, Performance Standard for Automotive Electrical Connector Systems, scope SAE International / USCARthat a car connector is tested against a carmaker-set standard through development, production and field analysis - the qualification that makes a designed-in connector costly to swap
Procedures included within this specification are intended to cover performance testing at all phases of development, production, and field analysis of electrical terminals, connectors, and components that constitute the electrical connection systems in low voltage (0 - 20 VDC) road vehicle applications.
backsC24 - S14primarycompany release2025-03-18NVIDIA press release - Spectrum-X and Quantum-X silicon photonics networking switches, 18 March 2025 NVIDIAthe named optical substitute at the switch: co-packaged optics shipping from 2025 and 2026
NVIDIA Quantum-X Photonics InfiniBand switches are expected to be available later this year, with NVIDIA Spectrum-X Photonics Ethernet switches coming in 2026 from leading infrastructure and system vendors.
backsC27 - S15primaryindustry data2026-09-16the rate behind machine.current, measured outside the connector industry
Global data center power demand capacity reached 122.9 GW in 2025 and is estimated to rise to 161 GW in 2026. In 2027, continued CapEx expansion by CSPs and sustained overall server shipments are expected to keep annual growth in data center power demand capacity above 30%.
backsC29 - S16primarycompany filing2026-09-2944 open-market sales and no purchases, the Rule 10b5-1 flag on each, and the discretionary sales by the CFO and the General Counsel on 2025-11-03backsC36
- S17primarycompany release2026-07-22orders by segment (Q3 FY2025 $4,472M, Q3 FY2026 $5,693M, book-to-bill 1.10), recast Q4 FY2025 adjusted EPS of $2.59, total debt $5,632MbacksC10
- S18primarycompany filing2026-01-15beneficial ownership at January 8, 2026 and the holders above 5%, director and officer biographies, the fiscal 2025 annual incentive metrics, weights and scores, the PSU design and the fiscal 2023 PSU payoutbacksC44C45C46
- S19primarycompany filing2023-11-13fiscal 2021 to 2023 income statements: research, development and engineering expenses of $677M, $718M and $708M against the narrower research and development amounts in the accounting-policy notebacksC48
- S20primarycompany release2026-10-28fourth-quarter and fiscal 2026 sales, orders, GAAP and adjusted EPS, margins, free cash flow, the first-quarter fiscal 2027 outlook and the fiscal 2027 sales viewbacksC15C50
- S21primarycompany release2026-10-28segment orders and book-to-bill, sales by end market with organic growth (digital data networks $949M up 34%, automotive $1,933M up 7%), segment adjusted margins, the first-quarter guidebacksC15C50
- S22primarytranscript2026-10-28Fiscal Q4 2026 earnings call transcript (FMP), held 2026-10-28data/cache/transcripts/TEL-2026Q4.jsonmanagement on fiscal 2027 growth, digital data networks revenue up over $1B, the copper-versus-optical addressable market, automotive content in a falling production market, and margin reinvestment; 9 analyst turns
we see the copper addressable market growing over 100%
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