Oppenheimer has upgraded TE Connectivity (NYSE: TEL) from Perform to Outperform and established a $270.00 price target, citing a combination of secular market exposures and recent operational momentum.
The research house pointed to rapidly scaling AI and data-center end-market exposure, an accelerated electric grid exposure profile bolstered by the Richards acquisition, favorable commercial vehicle and factory automation cyclical positioning, and resilient high-single-digit organic trends in Aerospace & Defense as rationale for the rating change.
TE Connectivity shares have pulled back from earlier 2025 highs even as the firm continues to deploy and execute its business model, according to Oppenheimer. The stock is trading at $225.49 and carries a price-to-earnings ratio of 32.72, keeping it near its InvestingPro Fair Value assessment. InvestingPro data referenced by the research indicates 11 analysts recently revised their earnings estimates upward for the upcoming period.
Oppenheimer’s $270 target represents 22 times its fiscal year 2027 earnings-per-share estimate of $12.30, a figure that the firm slightly raised from a prior $12.15. For the current fiscal year, consensus analyst expectations are for EPS of $11.07. Oppenheimer also notes TE Connectivity is operating from a position of financial strength, characterized by moderate debt levels and robust cash flows.
Recent operating results and peer activity
TE Connectivity reported fiscal first-quarter earnings and revenue that exceeded analyst expectations, driven by strength in its Industrial and Transportation segments. Truist Securities highlighted the company’s solid calendar fourth-quarter performance as well, noting a book-to-bill ratio of 1.1x.
Other broker activity has followed with upward adjustments to valuations: Barclays raised its price target to $302 while maintaining an Overweight rating, a change representing a 1.7% increase from its prior valuation. Truist Securities increased its price target to $244 and retained a Hold rating.
Summary of analyst rationale
- Oppenheimer sees growing AI/data-center exposure as a key growth vector.
- The Richards acquisition is cited as accelerating TE Connectivity’s exposure to electric-grid opportunities.
- Cyclical positions in commercial vehicles and factory automation, plus steady Aerospace & Defense organic growth, underpin the upgraded view.
Key points
- Oppenheimer upgraded TEL to Outperform with a $270 target, equating to 22x its FY2027 EPS estimate of $12.30.
- Market dynamics cited include AI/data-center expansion, electric grid exposure via the Richards acquisition, and solid industrial end-market performance.
- Recent quarterly results outpaced expectations, led by Industrial and Transportation segments; Truist noted a 1.1x book-to-bill for the calendar fourth quarter.
Risks and uncertainties
- Valuation sensitivity - TEL’s current P/E of 32.72 leaves limited margin if earnings do not meet raised expectations; this primarily affects equity investors and market valuations.
- Execution risk - continued deployment of the company’s business model and integration of acquisitions such as Richards must proceed as planned to realize the cited exposure benefits; this impacts industrial and infrastructure end markets.
- Analyst revisions - while 11 analysts have raised near-term earnings, changes in analyst sentiment or forecast revisions could influence market perception and stock trajectory.
InvestingPro subscribers can access 10 additional ProTips and a full Research Report on TE Connectivity, one of more than 1,400 US equities covered with in-depth analysis. The firm’s balance-sheet commentary and the mix of analyst target changes from Barclays and Truist provide additional context for investors assessing the company’s near- and medium-term outlook.
Conclusion
Oppenheimer’s upgrade to Outperform and the $270 target reflect conviction in multiple secular and cyclical end markets for TE Connectivity, supported by recent outperformance in reported results and a string of analyst adjustments. The company’s moderate leverage and strong cash flow profile are cited as supporting factors, though valuation and execution remain meaningful considerations for investors.