Stock Analysis | TE Connectivity Outlook - Technical Weakness Looms Amid Mixed Analyst Expectations

1. Market Snapshot

TE Connectivity (TEL) is trading down -3.91% in recent sessions, with technical indicators showing bearish dominance. Our internal diagnostic score for technical analysis stands at 3.05, suggesting weak momentum and potential for further downside.

2. News Highlights

• Teledyne Geophysical Instruments launched the eXtreamer, a new marine seismic survey tool, signaling innovation in its specialized instruments division.
• Apple announced a $100 billion investment in U.S. manufacturing, including Texas Instruments’ Utah plant — while not directly involving TE Connectivity, the broader manufacturing sector is seeing tailwinds.
• Multiple chip equipment firms like Veeco Instruments and MKS Instruments reported stronger-than-expected earnings and revenue — hinting at sector-wide strength, but TE Connectivity has not yet seen similar surprises.

3. Analyst Views & Fundamentals

Analysts are split on TEL: The average rating score is 4.00 (simple mean), while the performance-weighted rating stands at 3.38. With 7 active analysts, recent ratings include 4 "Neutral," 4 "Strong Buy," and 1 "Buy." This indicates some optimism but also notable dispersion.

Notably, the stock's price trend (-3.91%) contrasts with a relatively neutral weighted market expectation, suggesting the market is underperforming current expectations.

Key fundamental factors and internal diagnostic scores include:

• EV/EBIT: 30.08 with a strong score of 7.64 — signaling good enterprise value relative to earnings.
• Price-to-Sales (PS): 14.39 with an internal score of 3.36 — indicating some overvaluation concerns.
• ROE (Diluted): 4.48% with a score of 1.33 — suggesting room for improvement in returns for shareholders.
• Net Profit Margin: 0.31% with a score of -0.43 — indicating low profitability.
• Return on Assets (ROA): 0.05% with a score of 0.02 — showing very weak asset utilization.

4. Money-Flow Trends

Big money is showing interest in TEL with a positive overall trend. The fund-flow score stands at 7.65, classified as "good." Large and extra-large institutional inflows are above 47-50%, suggesting institutional confidence. However, small investors are flowing out, with small inflow ratios below 50%, indicating caution at the retail level.

5. Key Technical Signals

TE Connectivity's technical indicators are mostly bearish. With 3 bearish signals and 0 bullish ones, the internal diagnostic score for the technical analysis is 3.05 — a clear "weak trend" signal.

• MACD Death Cross has an internal score of 1.00 — a very bearish sign with a historical win rate of only 33.33%.
• Williams %R Overbought and RSI Overbought both have scores around 4.00 — suggesting potential for correction.
• Williams %R Oversold scores at 3.62 — a weaker bearish signal.

Key chart patterns over the past two weeks include a MACD Death Cross on August 6, followed by WR Oversold signals — suggesting a potential reversal from overbought to oversold territory. The overall trend remains weak, with a lack of clear direction.

6. Conclusion

TE Connectivity appears to be in a weak technical phase with mixed analyst views. While fundamentals like EV/EBIT are strong, other metrics like ROE and net profit margin are lagging. The fund-flow pattern is encouraging, but retail investors are pulling back. Given the bearish technical signals and lack of momentum, we recommend investors consider waiting for a clearer breakout or further fundamental catalysts before entering a position.