Earnings Update: TE Connectivity plc (NYSE:TEL) Just Reported Its Second-Quarter Results And Analysts Are Updating Their Forecasts

Shareholders of TE Connectivity plc (NYSE:TEL) will be pleased this week, given that the stock price is up 12% to US$144 following its latest quarterly results. It was a workmanlike result, with revenues of US$4.1b coming in 4.3% ahead of expectations, and statutory earnings per share of US$0.04, in line with analyst appraisals. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Following the latest results, TE Connectivity's 18 analysts are now forecasting revenues of US$16.6b in 2025. This would be a modest 3.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 25% to US$5.82. In the lead-up to this report, the analysts had been modelling revenues of US$16.1b and earnings per share (EPS) of US$5.95 in 2025. So it's pretty clear consensus is mixed on TE Connectivity after the latest results; whilethe analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.

View our latest analysis for TE Connectivity

The consensus price target was unchanged at US$162, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on TE Connectivity, with the most bullish analyst valuing it at US$190 and the most bearish at US$140 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting TE Connectivity's growth to accelerate, with the forecast 7.8% annualised growth to the end of 2025 ranking favourably alongside historical growth of 5.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.1% annually. TE Connectivity is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple TE Connectivity analysts - going out to 2027, and you can see them free on our platform here.

Even so, be aware that TE Connectivity is showing 1 warning sign in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.