On Wednesday, Evercore ISI adjusted its price target for Amphenol Corporation (NYSE:APH), a leading producer of electronic and fiber optic connectors, cable, and interconnect systems, to $75 from the previous target of $150. The revision reflects a two-for-one stock split executed this week and the recent acquisition of Carlisle Interconnect Technologies (CIT). Despite the price target adjustment, the firm maintains an Outperform rating on the stock.
The acquisition of CIT, which was completed on May 11, is expected to contribute $900 million in revenue for the calendar year 2024. This has led Evercore ISI to increase its revenue estimate for Amphenol to $14.0 billion, up from the prior estimate of $13.5 billion. The new estimate accounts for a partial year of CIT's contribution for 2024.
Amphenol's revised earnings per share (EPS) estimate for the calendar year 2024 now stands at $1.68, reflecting approximately $0.01 in accretion from CIT after the stock split adjustment. CIT, which specializes in solutions for harsh environments within the commercial air, defense, and industrial markets, is noted for its EBITDA margin of around 20%. Evercore ISI suggests that if Amphenol can improve CIT's margins towards its own 24% levels, CIT could be accretive by about $0.06 to $0.08 on an annual basis once fully integrated.
Evercore ISI highlights that mergers and acquisitions are a core part of Amphenol's strategy. The firm's history of successfully integrating acquisitions and achieving synergies bolsters confidence in its ability to enhance the margin profile of newly acquired companies. The adjustment of the target price to $75 is to account for the recent stock split and is unchanged on a split-adjusted basis.
In other recent news, Amphenol Corporation announced the completion of a two-for-one stock split and an adjusted dividend. The stock split has doubled the number of shares, making them more accessible to a broader base of investors, while the dividend has been adjusted to $0.11 per share. These developments are part of Amphenol's ongoing efforts to enhance shareholder value.
In the analysis realm, Citi has maintained a Buy rating on Amphenol, raising the price target to $160 from $135, reflecting a positive outlook for the company's revenue and earnings per share (EPS) growth. Truist Securities has also increased its price target for Amphenol to $149, factoring in the financial implications of the recent acquisition of CIT. Baird has lifted its price target to $137, citing growth drivers like advancements in AI sales and performance in the automotive sector. Edward Jones has reaffirmed its Buy rating on Amphenol, anticipating a 12% long-term earnings growth for the company.
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