On Wednesday, Stifel adjusted its outlook on Amphenol Corporation (NYSE:APH), a leading manufacturer of electronic and fiber optic connectors, cable, and interconnect systems. The firm reduced the price target to $66 from the previous $112 but retained a Hold rating on the stock. The revision comes after considering Amphenol's recent acquisition of Carlisle Interconnect Technologies (CIT) and the impact of the company's 2-for-1 stock split.
The analyst from Stifel remarked that the new price target accounts for CIT's integration into Amphenol's business. CIT, which operates in the aerospace, industrial, and military sectors, is expected to have a revenue run-rate of around $900 million. The revised model by Stifel now includes a $620 million revenue contribution from CIT for this year, along with a one-cent increase in earnings per share (EPS) accretion.
In light of the acquisition and the company's performance, Stifel has raised its sales and EPS estimates for fiscal year 2025 from $14.3 billion and $1.78 to $15.3 billion and $1.88, respectively. The new price target of $66 equates to 35 times the firm's FY25 EPS estimate, which is significantly higher than Amphenol's historical forward price-to-earnings ratio of 25 times.
The decision to maintain a Hold rating on Amphenol shares reflects the firm's cautious optimism regarding the company's growth prospects following the acquisition and stock split, while also considering the stock's valuation relative to its historical averages.
In other recent news, Amphenol Corporation has seen significant developments. The company executed a two-for-one stock split and adjusted its dividend to $0.11 per share, aiming to make shares more accessible to a broader investor base. Amphenol also completed the acquisition of Carlisle Interconnect Technologies (CIT), a move which Evercore ISI predicts will contribute $900 million in revenue for 2024.
This acquisition has prompted Evercore ISI to raise its revenue estimate for Amphenol to $14.0 billion. Furthermore, the company's earnings per share (EPS) estimate for 2024 has been revised to $1.68, reflecting a contribution from CIT after the stock split adjustment.
Several analyst firms have responded to these developments with optimism. Citi maintained a Buy rating on Amphenol, increasing the price target to $160, while Truist Securities raised its price target to $149, factoring in the CIT acquisition. Baird also increased its price target to $137, citing growth drivers such as AI sales and performance in the automotive sector. These are the recent developments for Amphenol Corporation.
InvestingPro Insights
Amphenol Corporation (NYSE:APH) has demonstrated a combination of financial resilience and strategic growth, reflected in its consistent dividend increases over the past 20 years, including a 4.76% dividend growth in the last twelve months as of Q1 2024. With a market capitalization of $82.5 billion, Amphenol's commitment to shareholder returns is evident. The company's recent performance showcases a solid 70.43% one-year price total return, indicating robust investor confidence and market performance. Additionally, Amphenol's revenue growth of 1.52% in the last twelve months and a notable quarterly revenue growth of 9.49% in Q1 2024 highlight the company's capacity to expand its financial top line.
InvestingPro Tips reveal that Amphenol is a prominent player in the Electronic Equipment, Instruments & Components industry, with a track record of maintaining dividend payments and delivering a high return over the last year. These factors, combined with the company's low price volatility and moderate level of debt, provide a comprehensive picture of its financial stability and potential for sustained growth. For a deeper analysis and additional tips, visit https://www.investing.com/pro/APH, where 19 more InvestingPro Tips are available. To enhance your investment strategy further, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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