Stock Analysis | TE Connectivity Outlook - Technical Weakness and Mixed Analyst Signals

Market Snapshot

TE Connectivity (TEL.N) is showing a mixed market picture with a current price decline of -0.83%. Despite strong fundamental scores from our proprietary model, technical indicators are bearish, suggesting caution for potential investors. Overall stance: cautious due to weak technical signals.

News Highlights

• May 30, 2025: Texas Instruments' $30B Expansion - Texas Instruments is making headlines with its $30 billion expansion in Sherman, Texas, including a 53-acre mixed-use development. While not directly linked to TEL, it signals broader strength in the semiconductor industry, which could indirectly benefit TE Connectivity.
• May 30, 2025: European Central Bank's Policy Statement - European Central Bank President Christine Lagarde stated the ECB is ready to use all tools to maintain financial stability amid tariff concerns. A stable macroeconomic environment could support industrial stocks like TEL.
• May 29, 2025: First Human Use of Remanufactured Surgical Instruments - Though unrelated to TEL's core industrial segments, the medical tech sector’s innovation highlights broader industrial trends, which could influence investor sentiment.

Analyst Views & Fundamentals

Analyst ratings for TE Connectivity show a simple average rating of 3.67 and a historical performance-weighted rating of 2.69. The ratings are mixed, with a recent 20-day rating distribution of 1 "Strong Buy," 2 "Buy," and 3 "Neutral", reflecting disagreement among analysts.

This is in line with the current price trend of -0.83% — a sign of neutral to bearish sentiment. Despite the mixed analyst views, key fundamentals remain strong:

• Price-to-Sales (PS): 14.39 (value: 14.38698909236302)
• Net Profit Margin: 6.78%
• Return on Equity (ROE): 4.48%
• Cash flow from operations (CFOA): 2.76%

Our proprietary fundamental model assigns a high score of 7.72 based on these and other factors. This reinforces that while the stock may be correcting in the short term, its underlying business remains fundamentally sound.

Money-Flow Trends

Big money is moving with caution. Large institutional investors are showing a negative trend, with an inflow ratio of 45.5%. In contrast, retail investors are showing a positive trend, with a 50.1% inflow ratio. However, this optimism is being offset by the overall negative trend in medium and extra-large institutional flows.

Our proprietary fund-flow model assigns TEL a score of 7.69, indicating strong inflows relative to its size and volatility. This suggests that while institutional investors are cautious, the broader market still sees value in the stock.

Key Technical Signals

Our technical analysis gives TEL a low score of 2.97 based on 4 indicators, indicating a weak trend. Here’s the breakdown:

• Williams %R Overbought: Internal diagnostic score of 3.09 — neutral rise expected.
• Williams %R Oversold: Internal diagnostic score of 3.38 — neutral rise expected.
• Bearish Engulfing: Internal diagnostic score of 4.42 — suggests caution, with a history of negative returns.
• MACD Death Cross: Internal diagnostic score of 1.00 — strongly bearish signal, historically linked to price declines.

Over the last 5 days, chart patterns have included WR Oversold and Bearish Engulfing signals, pointing to weaker momentum. With 3 bearish indicators vs. 0 bullish, the model concludes that the technical trend is weak and suggests avoiding the stock for now.

Conclusion

TE Connectivity presents a mixed outlook — strong fundamentals with weak technicals and a divided analyst outlook. While the company’s financials suggest long-term stability, the recent bearish technical signals and institutional outflows are red flags for near-term risk.

Actionable takeaway: Consider waiting for a clearer breakout or a pull-back in price, and monitor upcoming earnings or major industry trends that could shift the sentiment. Until the technical picture improves, proceed with caution.