TE Connectivity Outlook - Weak Technicals and Mixed Analyst Ratings

1. Market Snapshot

Headline Takeaway: TE Connectivity (TEL) faces a weak technical outlook with a low internal diagnostic score of 2.04, suggesting investors should proceed with caution. Meanwhile, the stock has shown a 1.34% recent price rise, but with mixed analyst expectations.

2. News Highlights

• Texas Instruments Expansion: Recent news highlights a $30 billion expansion by Texas Instruments, which could indirectly benefit industrial sectors TE Connectivity operates in. A 53-acre mixed-use development is being planned to support the workforce in Sherman, Texas.
• EDS Detectors Market Growth: A recent report forecasts the EDS Detectors Market to grow at a compound annual rate of 8.2% through 2031. While not directly related to TE Connectivity, the industrial and electronics sectors are likely to benefit from such long-term demand trends.
• Robotic Instruments Innovation: A major milestone in surgical robotics was reached with the first-in-human use of remanufactured da Vinci Xi® robotic instruments. While this is in a different industry, it showcases continued innovation in electronics and precision manufacturing—sectors where TE Connectivity has a presence.

3. Analyst Views & Fundamentals

Analysts remain divided on the stock. The simple average rating stands at 3.67, while the performance-weighted rating is slightly lower at 3.15. This reflects a mixed consensus with six institutions having provided recent ratings: Strong Buy (1), Buy (2), and Neutral (3).

Notably, the stock’s current price trend is upward (1.34%), but only two out of six ratings are strongly positive. This suggests some divergence between market expectations and analyst sentiment.

Key fundamental values and their internal diagnostic scores (0-10):

• Shareholders’ equity attributable to parent company / Total liabilities (%): 105.65% – score 3.0
• Equity ratio (Total liabilities / Shareholders’ equity attributable to parent company) (%): 94.65% – score 3.0
• Price-to-Sales (PS) ratio: 14.39 – score 1.0
• Return on Assets (ROA): 0.05% – score 1.0
• Current assets turnover ratio: 0.96 – score 1.0
• ROE (diluted): 4.48% – score 2.0

Overall, the fundamental score is 6.78 (on a 0–10 scale), indicating a moderate outlook, but technical and analyst signals suggest caution.

4. Money-Flow Trends

Big money is exiting TEL as the block trend is negative, with a block inflow ratio of 0.46. In contrast, small investors are slightly more optimistic, with a positive small trend and a 0.51 small inflow ratio.

The overall fund-flow score is 7.69 (good), showing a mixed pattern between institutional and retail flows. Investors might interpret this as institutions taking a cautious stance while retail investors remain mildly bullish.

5. Key Technical Signals

TE Connectivity's technical indicators are currently bearish, with 2 bearish signals and 0 bullish ones. Here are the recent developments:

• WR Overbought has an internal diagnostic score of 3.07, signaling a neutral rise. This pattern has historically had a 48.78% win rate and an average return of 0.51%.
• Bullish Engulfing is rated 3.0 (weak), suggesting a biased bearish outlook. This pattern has performed poorly in the past, with a 20.0% win rate and an average return of -1.87%.

Recent chart activity: The WR Overbought pattern has appeared on multiple occasions over the last five days, including on August 26, 28, September 4, and 5, which may indicate overbought conditions. The technical score remains weak at 2.04, with key insights highlighting obvious bearish dominance and a weak market state.

6. Conclusion

Given the weak technical signals and mixed analyst sentiment, investors should consider waiting for a clearer pull-back before entering a position. While the fundamentals remain relatively stable, the bearish technical environment and the low internal diagnostic score (2.04) suggest caution. Keep an eye on upcoming earnings or broader industrial sector trends to gauge potential turning points.