On Thursday, BofA Securities adjusted its outlook on Amphenol Corporation (NYSE:APH), a leading producer of electronic and fiber optic connectors, cable, and interconnect systems. The firm increased the price target for Amphenol (NYSE:APH) shares to $121.00, up from the previous target of $117.00, while reiterating a Buy rating on the stock.
The revised price target comes as BofA Securities anticipates Amphenol's first-quarter revenue to align with the consensus and potentially exceed expectations, particularly in the Military, mobile devices, and IT Datacom sectors.
The firm projects a first-quarter operating margin of 20.7%, which is slightly higher than the consensus estimate of 20.4%. Additionally, BofA Securities expects Amphenol's earnings per share (EPS) for the first quarter to be in line with the consensus at $0.74, and slightly above the high end of the company's guidance range of $0.71 to $0.73.
The analysis also suggests that the number of fully diluted shares may increase quarter over quarter, reflecting the recent movement in the company's share price. Looking ahead, BofA Securities predicts Amphenol will provide guidance for relatively flat revenue quarter over quarter after surpassing first-quarter expectations. However, for the second quarter, the firm anticipates revenue to reach approximately $3.3 billion, which would be around $70 million higher than the consensus estimate.
The increase in the price target to $121 from $117 is attributed to higher expected earnings per share (EPS) in 2025.
This projection takes into account factors such as the anticipated rise in interest expenses, which are expected to grow by approximately $19 million quarter over quarter. This increase is largely due to debt incurred from the $2 billion acquisition of Carlisle Interconnect Technologies, a significant move by Amphenol to expand its market presence and capabilities.
InvestingPro Insights
Following the optimistic outlook from BofA Securities on Amphenol Corporation, real-time data and insights from InvestingPro further illuminate the company's financial landscape. Amphenol, a key player in the Electronic Equipment, Instruments & Components industry, has a market capitalization of $66.88 billion and is trading at a P/E ratio of 34.54, which reflects a high valuation relative to near-term earnings growth, with a PEG ratio of 21.23. Despite a slight decrease in revenue growth over the last twelve months, the company maintains a robust gross profit margin of 32.53%.
InvestingPro Tips highlight that Amphenol has raised its dividend for 12 consecutive years, showcasing its commitment to shareholder returns. Additionally, four analysts have revised their earnings upwards for the upcoming period, indicating potential optimism in the company's financial performance. With a strong return over the last three months, the company's stock has also seen a substantial price uptick over the last six months.
For investors seeking deeper analysis and more InvestingPro Tips, Amphenol's profile on InvestingPro offers additional insights. With the use of the coupon code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable resources. Currently, there are 17 additional InvestingPro Tips available for Amphenol, which could further guide investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.