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Let's talk about the popular TE Connectivity Ltd. (NYSE:TEL). The company's shares saw significant share price movement during recent months on the NYSE, rising to highs of US$160 and falling to the lows of US$142. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether TE Connectivity's current trading price of US$144 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at TE Connectivity’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for TE Connectivity
What Is TE Connectivity Worth?
Great news for investors – TE Connectivity is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $184.52, but it is currently trading at US$144 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because TE Connectivity’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of TE Connectivity look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for TE Connectivity, at least in the near future.
What This Means For You
Are you a shareholder? Although TEL is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to TEL, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on TEL for a while, but hesitant on making the leap, we recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.