On Thursday, Truist Securities increased the stock price target for Amphenol Corporation (NYSE:APH) shares to $82.00, up from the previous target of $76.00, while keeping a Buy rating on the stock. The revision follows Amphenol's third-quarter earnings, which the firm found impressive due to better-than-expected revenue, margins, and earnings per share (EPS).
The company's third-quarter performance was highlighted by revenue and margin expansions, along with a rise in EPS. The provided guidance was slightly above the consensus, indicating a conservative yet positive outlook.
A notable factor contributing to the positive assessment was the strong book-to-bill ratio, which is expected to benefit from the growing demand for artificial intelligence (AI) systems, particularly those associated with NVIDIA (NASDAQ:NVDA), which also holds a Buy rating from the firm.
Truist Securities noted that Amphenol's capital allocation strategies continue to be a strong point for the company. The anticipated acquisition of the Andrew business is now expected to be finalized in the first quarter of 2025, a slight adjustment from the previously projected first half of the same year. This acquisition is poised to contribute to the company's growth alongside the AI sector's expansion.
The analyst from Truist Securities has adjusted the model for Amphenol, forecasting a rise in the calendar year 2025 EPS to $2.09, up from $2.02. The new price target of $82 is based on a 34 times multiple, which is a traditional 12 times premium over the S&P applied to the projected 2025 EPS of $2.40, including a 31 cents potential from mergers and acquisitions.
In other recent news, Amphenol Corporation reported robust earnings and revenue results, surpassing both company guidance and analyst estimates. The company's recent earnings report revealed a revenue of $4.04 billion and earnings per share (EPS) of $0.50. BofA Securities, who maintains a Neutral rating on Amphenol, has increased the company's stock price target to $74.00, up from a previous $70.00.
In other developments, Amphenol's operating margin increased by 110 basis points year-over-year and 60 basis points sequentially. The company's year-over-year revenue growth was reported at 26% in USD terms and 15% on an organic basis. BofA Securities anticipates near-term trends might be subdued in the Industrial and automotive sectors, counterbalanced by strength in the Information Technology and data communications sectors.
Finally, the company's plans now incorporate the impact of the Andrew acquisition, expected to commence in the second quarter of 2025. These are among the recent developments concerning the company.
InvestingPro Insights
Amphenol Corporation's strong performance and positive outlook are further supported by recent data from InvestingPro. The company's market capitalization stands at an impressive $82.46 billion, reflecting its significant presence in the Electronic Equipment, Instruments & Components industry. Amphenol's revenue growth of 14.17% over the last twelve months and a robust 26.24% quarterly growth in Q3 2024 align with Truist Securities' positive assessment of the company's recent earnings.
InvestingPro Tips highlight Amphenol's financial strength and market position. The company has maintained dividend payments for 20 consecutive years and has raised its dividend for 12 consecutive years, demonstrating a commitment to shareholder returns. This is particularly relevant given the analyst's note on Amphenol's strong capital allocation strategies.
Moreover, Amphenol's high return over the last year, with a one-year price total return of 74.24%, supports the analyst's bullish stance. The company is trading near its 52-week high, with its current price at 96.17% of the 52-week high, indicating strong market confidence.
For investors seeking more comprehensive insights, InvestingPro offers 16 additional tips for Amphenol, providing a deeper understanding of the company's financial health and market position.
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