Amphenol Reiterated at Neutral - Analyst Blog


On Jan 14, 2014, we have reaffirmed our long-term Neutral recommendation on Amphenol Corporation ( APH ). Amphenol serves a variety of end markets, the diversification of which enables it to post strong results. However, cut-throat competition and foreign currency translation undermine its long-term growth potential to some extent and force us to have a sideline view.

Why Neutral?

Amphenol's top-line growth is benefiting from improved end-market demand, new product rollouts, and market share gains. We note that demand continues to be strong in Aerospace, Industrial and Broadband Communications. The company also continues to expand in Information Technology and Data Communication segment with its various product innovations. The diversification in end markets enables the company to post strong results even in an uncertain economic environment with a consistent focus on technology innovation and customer support through all phases of the product life cycle.

The company intends to develop application-specific products, which will further reduce its exposure to standard products that generally experience greater pricing pressures. Amphenol's operating structure and cost-control measures enable it to maximize profitability while strengthening its position in the market.

However, bulk of the company's revenues is generated from the communications industry, demand for which is subject to rapid technological change. In addition, these markets are dominated by several large manufacturers and operators who exert significant pricing pressure on Amphenol, thereby adversely affecting its financial position.

Consequently, over the last 30 days, the Zacks Consensus Estimate for 2013 has remained constant at $3.78. For 2014, the Zacks Consensus Estimate has moved up by 2 cents during the same time period to $4.21.

Other Stocks to Consider

Amphenol currently has a Zacks Rank #2 (Buy). Other stocks that look promising in the industry include Cirrus Logic Inc . ( CRUS ), carrying a Zacks Rank #1 (Strong Buy), while Methode Electronics, Inc . ( MEI ) and IEC Electronics Corp . ( IEC ), both carrying a Zacks Rank #2 (Buy).

AMPHENOL CORP-A (APH): Free Stock Analysis Report

CIRRUS LOGIC (CRUS): Free Stock Analysis Report

IEC ELECTRS NEW (IEC): Free Stock Analysis Report

METHODE ELECT-A (MEI): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: APH , CRUS , IEC , MEI

More from

Related Videos

Freshman Finance 101
Freshman Finance 101                
Spot the Dropout RRC
Spot the Dropout RRC                
Power on/Power Off
Power on/Power Off                  



Most Active by Volume

  • $16.34 ▼ 0.12%
  • $10.64 ▲ 1.33%
  • $112.76 ▼ 0.47%
  • $5.86 ▲ 1.38%
  • $28.54 ▲ 0.42%
  • $104.31 ▼ 1.24%
  • $13.87 ▲ 0.95%
  • $10.40 ▲ 0.97%
As of 8/31/2015, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by