TEL US S&P 500 Earnings call
TE Connectivity (TEL) · Q2 2026 results and valuation
Share price: $219.41 · 2026-11-11
Results Q2 2026 vs Q1 2026 · previous quarter · fiscal Q3 2026 · published 22 Jul 2026 and 22 Apr 2026
Net income down 12.5% on the previous quarter. Management sounded very upbeat, though noticeably less so answering analysts.
Only a basic analysis is available for this company at the moment.
1 · Numbers
−12.5%
Net income vs Q1 2026
Outlook given
Net income 748.0M vs 855.0M
Revenue +8.8%
Against the same quarter last year (Q2 2025) it is +17.2%, so the move on last quarter looks seasonal or timing-related rather than a trend.
2 · How management spoke
Very upbeat
Among the most upbeat of all company calls
Answers to analysts: upbeat, but clearly less so than the script.
The step down under questioning is bigger than last call.
3 · What stood out
TE Connectivity raised its full fiscal year sales growth forecast to approximately 15%, which represents more than $2.5 billion of incremental revenue.
Valuation
Is TE Connectivity undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-09-26), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 2.0% growth a year (3-year revenue growth), the model's fair value is $127.63 a share — the stock trades 72% above it. Today's price assumes 8.7% growth a year.
Current price
$219.41
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+8.7% for 10 yrs
Fair value / share
$127.63
Buy below
$95.72
Price vs fair value
Overvalued 72%
Price vs buy-below price
Overvalued 129%
Management expects
Sales +15% · from the Q2 2026 report: “Full-year sales are now expected to grow approximately 15%, representing more than $2.5 billion of incremental 2026 revenue.”
A guidance figure for sales, usually one year ahead, not a 10-year free-cash-flow rate.
Read between the lines
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Key theme
Industrial Solutions margins rose to nearly 23%.
Source quote
“At the segment level, turning to margins, Industrial Solutions segment adjusted operating margins expanded 70 basis points to nearly 23%... In our medical business, our team delivered sales as we expected. Let me turn to our Transportation Solutions segment, and that'll be on slide six.”
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Key theme
TE Connectivity also continues to benefit from continued market momentum driven by both secular growth trends as well as positive cyclical…
Source quote
“We also continue to benefit from continued market momentum driven by both secular growth trends as well as positive cyclical... We are at the intersection of the largest technology and infrastructure investment cycle that's taking place around the world. We'll click down on these during today's call.”
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Guidance
Margin outlook remains anchored to sustained expansion and double-digit earnings growth.
Source quote
“As we outlined at our investor day earlier this year, we expect our strategy to deliver broad-based growth while driving sustained margin expansion and double-digit earnings growth.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Management sounded noticeably less positive answering analysts than in its prepared script — one of the biggest drops of any company call. Scripts are polished in advance; a drop under questioning often marks the topics analysts pressed on, so the answers deserve a closer read than the script.
Sentences that drove the tone
“Importantly, our record order momentum and growing backlog provide increasing visibility into continued broad-based growth as we move into next year, reinforcing our strategy and our ability to compound earnings...”
“Our orders have not only translated into strong growth this year, but also have resulted in a record backlog position, and this backlog position is a strong growth indicator as...”
“These record Industrial orders were driven by increasing momentum in AI, along with strong growth in every business.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-06-26)
| Metric | Q2 2026period end 2026-06-26 | Q1 2026period end 2026-03-27 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 5.16B | 4.74B | +8.8% | 4.53B | +13.8% |
| Gross profit | 1.83B | 1.75B | +5.2% | 1.60B | +14.7% |
| Operating income | 981.0M | 954.0M | +2.8% | 857.0M | +14.5% |
| Net income | 748.0M | 855.0M | −12.5% | 638.0M | +17.2% |
| EPS | 2.55 | 2.90 | −12.1% | 2.14 | +19.2% |
| P/E today 21.4 | 19.4 | 20.7 | −1.3 | 34.4 | −15.0 |
Topics
Most discussed now
- The adjusted effective tax rate was 23% in Q3, and TE Connectivity expects Q4's rate to be between 22%-23%.
- When you look at it, as architecture is evolving, and that's why you hear the global merchant chip makers say...
- Given the order strength that Terrence mentioned earlier, TE Connectivity will exit this year with a strong backlog position in both...
- This slide reinforces the themes Terrence discussed, which are ongoing broad-based growth across the segments, strong operational execution…
- When you look at energy and AD&M, they're really, really strong secular growth trends that TE Connectivity doesn't see that momentum...
Faded since Q1 2026
- Fading This year, TE Connectivity expects to deliver well over $2 billion of growth, with the majority of its businesses growing double...
- Fading TE Connectivity also delivered earnings growth of 24% in the quarter.
- Fading It's based on the backbone is how TE Connectivity capitalizes on the proliferation of data and power by providing leading interconnect...
- Fading The strategy TE Connectivity laid out, it believes, will drive ongoing value creation for its owners.
Latest announcements
Official filings, newest first.
- Director or officer change · SEC 8-K
- Results of operations; Regulation FD disclosure · SEC 8-K
- Results of operations; Regulation FD disclosure · SEC 8-K
- Shareholder vote results · SEC 8-K
- Material agreement; Agreement terminated; New financial obligation · SEC 8-K
- Other events · SEC 8-K
- Results of operations; Regulation FD disclosure · SEC 8-K
- Regulation FD disclosure · SEC 8-K