TE Connectivity Ranked Highest by Growth Investor Model

TE Connectivity PLC has received a 46% rating from the Growth Investor strategy, indicating moderate potential but mixed fundamentals. Key metrics like earnings growth show some weaknesses, which may impact investor sentiment.

Date: 23-11-2024

AI Rating: 5

The report highlights that TE Connectivity PLC (TEL) holds a 46% rating under the Growth Investor model based on Martin Zweig's strategy. While the rating is not exceptionally high, it indicates that TEL is viewed positively regarding growth stocks due to its underlying fundamentals.

Revenue Growth: The stock passes the criteria for revenue growth, suggesting an expanding top line, which is a positive indicator for potential stock price appreciation.

EPS Growth Rate: However, the report indicates multiple failures concerning earnings growth rate, particularly for the current quarter and in comparison to prior quarters. Specifically, it notes:

Positive earnings growth rate for the current quarter: FAIL
EPS growth for the current quarter must be greater than prior 3 quarters: FAIL
EPS growth for the current quarter must be greater than the historical growth rate: FAIL
Earnings persistence: FAIL
Long-term EPS growth: FAIL

This pattern of failures regarding earnings metrics, especially given the importance of EPS in the investment community, is a major red flag. Low earnings persistence and several fails in the EPS growth criteria could lead to negative sentiment among investors.

Overall Impact: Despite solid ratings in sales growth and reasonable debt levels, the report draws attention to significant weaknesses in key earnings metrics. Investors may approach TEL with caution, considering its mixed performance and failed EPS metrics. This could lead to price volatility or a decline as investor confidence could be impacted.

Stocks: TEL