TE Connectivity (TEL) Q4 Earnings Showcase Record Profit As Stock Cools

TE Connectivity came into this Q4 2026 print with a solid recent run, up roughly 7% over three months, yet the stock slipped about 1.8% on the day to around US$221. That muted reaction sits awkwardly against a quarter that delivered record scale and earnings power, with revenue at US$5.3b and basic earnings per share at US$3.12.

The real story is profitability. On a trailing basis, earnings from continuing operations reached US$3.3b and net margin improved meaningfully over the past year. For investors who buy the long term connectivity thesis, today looked less like a disappointment and more like a reality check on expectations baked into the price.

Love TE Connectivity's record earnings power but unsure whether the current price already reflects it? See how it stacks up against other high quality operators in our list of solid balance sheet and fundamentals stocks (24 results).

Q4 2026 Earnings Summary

• Revenue (Q4 2026 vs. Q4 2025): US$5,312m vs. US$4,749m (up 11.8%)
• Net Income from Continuing Operations, TTM to Q4 2026 vs. TTM to Q4 2025: US$3,255m vs. US$1,843m (up 76.7%)
• Basic EPS (Q4 2026 vs. Q4 2025): US$3.12 vs. US$2.25 (up 38.5%)
• Net Margin, TTM to Q4 2026 vs. TTM to Q4 2025: 16.4% vs. 10.7% (up 5.7 percentage points)

TE Connectivity thinks digital data networks can keep adding $1B a year. Ask Charlie what TE Connectivity sees in its AI data boom.

TE Connectivity’s Growth Story Meets Hard Milestones

The bullish script hinges on TE Connectivity steadily adding more content into autos, data centers and energy systems while keeping profitability tight.

"A key factor is continued execution on higher content per system in autos, data centers, and energy, so that the company can pursue outgrowth in key end markets while holding operating margins near the recent 22% level."

The latest year shows that playbook working. Automotive content expansion helped Transportation organic sales outpace vehicle production. Digital Data Networks orders were up about 70% with management guiding to more than US$1b of extra DDN revenue in FY2027. Adjusted operating margin finished FY2026 around 22%, so the margin bar in the narrative has been met so far.

Not everyone reads the same price the same way. → See the higher figure this Narrative lands on, and how it gets there.

TE Connectivity Bear Case: AI Buildout Risk Still Unproven

The cautious view argues that TE Connectivity might be overbuilding for an AI and grid cycle that cools before new plants earn their keep.

"The heavy capital deployed into AI oriented power connectivity and RAM Photonics ahead of meaningful optical revenue from 2028 to 2029 raises the possibility that any slowdown in AI buildouts leaves underused assets and drags on group operating margins."

Fresh numbers do not show that squeeze yet. Adjusted operating margin held near 22% and free cash flow matched adjusted net income. DDN and Energy produced double digit organic gains with a 29% orders jump and a higher backlog, so the underutilization risk remains theoretical in this quarter’s figures.

Hunt For Mispriced Execution Stories

TE Connectivity just reminded you that strong reported results can appear without a big share move. The real opportunity is finding stocks that could be undervalued before the market corrects them.

• Company 1 - 46% below our estimate - converts a near record project backlog into higher margin mega-project work while containing legacy disputes and related cash drags.
• Company 2 - 31% below our estimate - tightens margins through a formal operating system that reshapes its portfolio and footprint toward higher return aftermarket and power work.
• Company 3 - 23% below our estimate - leans into AI centric networking and data center gear so more revenue arrives as recurring, higher margin services contracts.

That is three of the list. See the full list of 26 companies trading below our fair value estimates →

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