Core Insights - TE Connectivity plc reported a strong fiscal first quarter for 2026, exceeding guidance with a 22% increase in sales and over 30% growth in earnings per share (EPS) year over year [1][2] - The company's growth was driven by investments in data and power connectivity, particularly in applications such as AI, energy grid hardening, and next-generation vehicles [2] - Record quarterly orders exceeded $5 billion, indicating a robust demand across both Industrial and Transportation segments [2] Financial Performance - Net sales reached $4.7 billion, a 22% increase year over year, with organic growth of 15% [5][12] - GAAP diluted EPS from continuing operations was $2.53, reflecting a 45% increase year over year, while adjusted EPS was $2.72, up 33% [5][12] - The GAAP operating margin improved to 20.6%, a rise of 260 basis points year over year, and the adjusted operating margin expanded to 22.2% [5][12] Second Quarter Outlook - For the second quarter of fiscal 2026, the company anticipates sales of approximately $4.7 billion, representing a 13% increase on a reported basis and 6% organically year over year [3] - Adjusted EPS is expected to be around $2.65, marking a 20% increase year over year, while GAAP EPS is projected at approximately $2.26 [3] Segment Performance - The Transportation Solutions segment generated net sales of $2.467 billion, while the Industrial Solutions segment reported $2.202 billion [16] - Operating income for Transportation Solutions was $501 million with a margin of 20.3%, and for Industrial Solutions, it was $462 million with a margin of 21.0% [16] Cash Flow and Shareholder Returns - Cash flow from operating activities was $865 million, with free cash flow amounting to $608 million [5][15] - The company returned $615 million to shareholders during the quarter [5]

Core Viewpoint - TE Connectivity Ltd. is experiencing a positive trend in analyst target prices, reflecting growing confidence in its market position and growth potential [2][6]. Financial Performance - The company is expected to announce fiscal Q1 earnings with an EPS of $2.53 and sales of $4.5 billion, driven by robust orders and increasing demand across its key segments [3]. Innovation and Expansion - TE Connectivity focuses on innovation and expanding its product offerings, particularly in high-growth areas like electric vehicles and industrial automation [4]. Global Reach and Diversification - The company operates in approximately 140 countries, providing a diversified customer base that enhances stability and growth potential [5]. - Strategic partnerships and acquisitions may further enhance its market position and technological capabilities [5].

Core Viewpoint - TE Connectivity Ltd. (TEL) is poised to report strong financial results for its first-quarter fiscal 2026, with significant increases in earnings per share and net sales driven by robust demand in key segments [2][6]. Financial Performance - Analysts estimate an earnings per share (EPS) of $2.54 for the upcoming earnings report, reflecting a 30.3% increase from the same quarter last year [2]. - The company anticipates net sales of approximately $4.5 billion, representing a 17% year-over-year growth on a reported basis and an 11% rise on an organic basis [2]. Demand Drivers - TEL's growth is supported by robust orders totaling $4.7 billion in the fourth quarter, a 22% increase from the previous year, particularly in the Transportation and Industrial segments [3]. - The heightened demand is attributed to advancements in AI, electrification, and hyperscaler needs, which are expected to significantly contribute to revenue growth [3][6]. Earnings Estimates Stability - The stability in TEL's earnings estimates over the past 30 days indicates analysts' confidence in the company's performance, as there have been no revisions to initial estimates [4]. Financial Metrics - TEL has a price-to-earnings (P/E) ratio of approximately 38.6, a price-to-sales ratio of about 4.15, and an enterprise value to sales ratio of around 4.41, reflecting a strong financial position [5]. - The company's debt-to-equity ratio is approximately 0.45, suggesting a moderate level of debt relative to equity [5][6].

Core Insights - TE Connectivity (TEL) is set to report its first-quarter fiscal 2026 earnings on January 21, with expected adjusted earnings of $2.53 per share, reflecting a 23% year-over-year growth [1][9] - The Zacks Consensus Estimate for earnings stands at $2.54 per share, indicating a 30.3% increase from the previous year [1] - TEL anticipates net sales of approximately $4.5 billion for the first quarter, representing a 17% year-over-year growth on a reported basis and 11% on an organic basis [2][9] Financial Performance Expectations - TEL's first-quarter performance is expected to benefit from strong order volumes, with reported orders of $4.7 billion in the fourth quarter of fiscal 2025, marking a 22% year-over-year increase [4] - The Transportation segment, which accounted for 50.8% of fourth-quarter sales, is positioned to gain from the industry's shift towards data connectivity and electrification [5] - The Industrial segment, making up 49.2% of fourth-quarter sales, is likely to see growth driven by demand in AI applications, Energy, and Aerospace, Defense, and Marine sectors [6] Earnings Analysis - According to the Zacks model, TEL has an Earnings ESP of 0.00% and a Zacks Rank of 1 (Strong Buy), indicating a favorable outlook for earnings performance [7]

Summary of Key Points from the Conference Call Industry Overview - The focus of the conference call was on the **data center and networking equipment market** for the years **2026/27** with insights from **650 Group** [1] Core Insights and Arguments - **AI-driven Networking and Compute Spend**: The outlook remains elevated, driven by new XPUs, 800G network upgrades, and continued investments in scaling technologies [2][3] - **Networking Vendors**: Companies like **Arista (ANET)** and **Celestica (CLS)** are well-positioned to benefit from the adoption of 800G networking by hyperscalers in 2026/27 [2][3] - **Meta's Investment**: It is expected that **Meta's** spending on networking will significantly increase in 2026/27 after two years of under-investment, benefiting partners like ANET, CLS, and **Cisco (CSCO)** [3] - **Ethernet Networking Adoption**: Wider adoption in **Microsoft AI clusters** is anticipated to start in 2027, with 2026 still focused on existing Infiniband infrastructure [3] - **Scale Across Demand**: There is robust demand for connecting more data halls across geographies, primarily driven by Ethernet, although Infiniband demand will persist [3] Additional Important Insights - **Connector and Cabling Growth**: A significant increase in connector and cabling content per rack is expected with the introduction of **Rubin/Rubin Ultra**, compared to **Blackwell**. This growth is attributed to rising product complexity and sophisticated pin designs, benefiting companies like **Amphenol (APH)** and **TE Connectivity (TEL)** [2][5] - **Long-term Growth in Optics**: There is a positive outlook for optics, with recent transactions like **Amphenol - CCS** indicating strong growth potential [5] - **Cooling Technology**: The industry is expected to become more efficient, with new cooling technologies needed at 1 MW [5] - **Hyperscaler Preferences**: Hyperscalers are likely to continue using a mix of best-in-breed and white-box solutions, while enterprises may prefer reference-design systems from vendors with strong channel presences [6] Company Recommendations - **Buy Ratings**: The following companies have been assigned buy ratings: - **Amphenol Corp.** (Buy, $154.22) - **Arista Networks Inc.** (Buy, $130.59) - **Celestica Inc.** (Buy, $313.53) - **Flex** (Buy, $66.59) - **TE Connectivity Plc** (Buy, $241.92) [13] This summary encapsulates the key points discussed during the conference call, highlighting the trends, company positions, and market outlook for the data center and networking equipment industry.

Core Insights - TE Connectivity (TEL) is expected to report quarterly earnings of $2.54 per share, reflecting a 30.3% increase year over year, with revenues projected at $4.51 billion, a 17.5% year-over-year increase [1] Earnings Estimates - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate revisions and short-term stock performance [2] - The consensus EPS estimate for the quarter has remained unchanged over the last 30 days, indicating stability in analysts' projections [1] Key Metrics Projections - Analysts expect 'Net Sales- Transportation Solutions' to be $2.34 billion, a 4.5% increase year over year [4] - 'Net Sales- Industrial Solutions' is forecasted to reach $2.16 billion, indicating a significant 35.7% increase from the previous year [4] - 'Net Sales- Industrial Solutions- Medical' is estimated at $146.72 million, reflecting a slight decline of 2.8% year over year [4] - 'Net Sales- Transportation Solutions- Automotive' is projected at $1.79 billion, a 3.9% increase from the prior year [5] - 'Net Sales- Transportation Solutions- Sensors' is expected to be $212.30 million, showing a 1.6% year-over-year increase [5] - 'Net Sales- Industrial Solutions- Energy' is anticipated to reach $373.91 million, a substantial increase of 73.1% from the previous year [6] - 'Net Sales- Transportation Solutions- Commercial transportation' is projected at $331.15 million, indicating a 6.1% increase year over year [6] Operating Income Estimates - The consensus estimate for 'Adjusted Operating Income- Transportation Solutions' is $501.56 million, compared to $478.00 million reported in the same quarter last year [7] - Analysts estimate 'Adjusted Operating Income- Industrial Solutions' at $452.26 million, up from $267.00 million reported in the same quarter of the previous year [7] Stock Performance - TE Connectivity shares have increased by 6.5% over the past month, outperforming the Zacks S&P 500 composite, which moved up by 1.6% [8] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the overall market in the near future [8]

Summary of Key Points from the Conference Call Industry Overview - The focus is on the North American connectors and components industry, with a positive outlook extending into 2026 driven by AI demand and recovery in industrial sectors [1][2]. Core Companies Discussed 1. **Amphenol (APH)** - Positive short-term view due to data center exposure and potential upward estimate revisions following the completion of CCS acquisition [1]. - Expected revenue growth driven by AI servers and interconnect complexity across various end markets [22]. - Target price revised to $175 from $160, applying a 35x P/E multiple to N24M EPS [22][64]. 2. **Corning Inc. (GLW)** - Anticipated growth in the Enterprise Optical business due to increased demand for fiber connections and AI applications [28]. - Target price increased to $102 from $99, based on a ~28x P/E multiple [29][70]. 3. **TE Connectivity (TEL)** - Positive outlook due to improving auto production, despite uncertainties from semiconductor shortages [41]. - Target price remains at $290, applying a 24x P/E multiple to N24M EPS [41][79]. Key Demand Drivers - **AI & Cloud**: Increased data rates and power requirements are driving demand for connectors in AI servers [12]. - **Energy**: Growth in renewable energy is straining legacy infrastructure, increasing demand for connectivity solutions [12]. - **Aerospace & Defense**: Rising defense spending and platform innovation are driving upgrades across various systems [12]. - **Automotive**: Growth in vehicle content driven by ADAS and electrification, despite a stable but volatile production backdrop [12]. - **Factory Automation**: Increased adoption of robotics and automation technologies is driving demand for connectors [12]. Financial Performance and Estimates - **Amphenol**: - Q4 FY25 revenue of $6.24 billion, slightly above street estimates [23]. - Q1 FY26 revenue expected at $6.22 billion [23]. - **Corning**: - Q4 FY25 revenue of $4.41 billion, above street estimates [29]. - Q1 FY26 revenue expected at $4.24 billion [30]. - **TE Connectivity**: - Q1 FY26 revenue of $4.52 billion, in line with street estimates [42]. Risks Identified - **Amphenol**: Risks include economic slowdowns, raw material price increases, and challenges in integration of acquisitions [67]. - **Corning**: Risks include fluctuations in LCD glass market fundamentals and recession risks [73]. - **TE Connectivity**: Risks include economic fluctuations impacting auto production and raw material price increases [80]. Conclusion - The connectors and components industry is poised for growth driven by advancements in AI, energy infrastructure, and industrial automation. Key players like Amphenol, Corning, and TE Connectivity are expected to benefit from these trends, although they face various risks that could impact their performance.

Core Insights - ClearBridge Investments reported strong but volatile performance in US equities for Q4 2025, with the S&P 500 Index returning 2.7% and the Russell Midcap Growth Index declining 3.7% [1] - The ClearBridge Growth Strategy achieved its third consecutive quarter of outperformance through a balanced, highly active share approach, capturing early momentum while providing downside protection during rising volatility [1] - The strategy maintained a disciplined portfolio management and opportunistic capital allocation philosophy [1] Company Highlights - TE Connectivity Ltd. (NYSE:TEL) is highlighted as a key stock in the ClearBridge Growth Strategy, with a one-month return of 0.63% and a 52-week gain of 64.36% [2] - As of January 9, 2026, TE Connectivity's stock closed at $231.60 per share, with a market capitalization of $68.22 billion [2] - The outperformance of the ClearBridge Growth Strategy in Q4 was attributed to balanced portfolio construction and strong stock selection, with TE Connectivity contributing positively due to trends in its automotive and industrial sectors [3] Hedge Fund Interest - TE Connectivity is not among the 30 most popular stocks among hedge funds, but it saw an increase in hedge fund portfolios holding its stock, rising from 47 to 60 in the last quarter [4] - While TE Connectivity is recognized for its potential, the company is compared to certain AI stocks that are believed to offer greater upside potential and less downside risk [4]

Core Viewpoint - Tyco Electronics has applied for a patent for a "wire clamping component with two housing parts," indicating ongoing innovation in the electrical components sector [1]. Group 1: Patent Application Details - The patent application, published as CN121282659A, was filed on July 2025 [1]. - The invention pertains to a wire clamping component designed for automatically clamping conductors inserted in a specific direction [1]. - The component consists of a first housing part, a second housing part, and a clamping spring, with the first housing part attached to the second [1]. Group 2: Technical Specifications - The first and second housing parts define an internal volume within the component [1]. - The clamping spring is attached to the first housing part and extends into the internal volume, designed to clamp the conductor [1].

Core Insights - TE Connectivity plc (TEL) is recognized as a top long-term investment, particularly due to its strategic focus on AI-related sales growth and commitment to returning capital to shareholders through dividends [1][3]. Group 1: Financial Performance and Strategy - Truist Securities analyst William Stein maintained a Hold rating on TEL and raised the price target to $240 from $239, reflecting a stable outlook for the company [2]. - TEL's management aims to double AI-related sales over the next two years, indicating a strong positioning in the AI supply chain [2]. - The company has projected total sales growth of 6–8%, which is considered moderate [2]. Group 2: Dividend Policy - The board of TE Connectivity approved a quarterly cash dividend of $0.71 per share, payable on March 13, 2026, to shareholders of record at the close of business on February 20, 2026 [3]. - The ex-dividend date is also set for February 20, 2026, demonstrating TEL's ongoing commitment to returning capital to shareholders [3]. Group 3: Company Overview - TE Connectivity is a global industrial technology company that designs, manufactures, and sells connectivity and sensor solutions across various industries, including automotive, aerospace, defense, industrial automation, energy, medical devices, data centers, and communications infrastructure [4].