TE Connectivity Q4 sales rise 12% organically, EPS up over 20%; FY2027 guide for double-digit growth

What happened

TE Connectivity reported fiscal fourth-quarter net sales of $5.3 billion, up 12% reported and 13% organically year over year, with full-year sales growth of 15% and EPS growth exceeding 20%. The quarter was buoyed by strength in both Industrial and Transportation segments, a notable turnaround from earlier Transportation softness. Management guided to double-digit sales growth in fiscal 2027, signaling confidence in continued momentum. However, the press release omits segment-level details, particularly for the AI-driven Digital Data Networks business, which had been a key swing factor, and provides no margin specifics. Overall, the results confirm the backlog conversion narrative, but the lack of granularity leaves questions about the durability of DDN growth and transportation recovery.

Implication

The quarterly sales beat the prior quarter's guidance of about $5.0 billion, indicating robust order conversion, yet the 12% reported growth is lower than the record order growth seen earlier, suggesting some normalization. The double-digit FY2027 sales guidance embeds continued growth, but it may already be priced in given the stock's climb above the previous trim level of $235. Key risks remain: potential DDN demand volatility, structural price erosion in Transportation, and margin pressures from cost inflation. Until the company provides segment-level organic growth and margin details in its 10-K, the risk-reward is balanced; we would not chase the stock above the prior trim level and would look for a better entry near $220 on any pullback. The thesis has not materially changed, but the Q4 results tilt the balance slightly more positive for the bull case, provided DDN growth holds up.

Thesis delta

The prior WAIT thesis centered on waiting for a clean quarter confirming AI-related DDN growth durability and margin defense. The Q4 results show strong overall sales and EPS growth, but without segment detail, we cannot confirm whether DDN growth remained robust or if Transportation recovery is sustainable. The thesis modestly improves, but we keep the WAIT rating until we see the 10-K segment disclosures; the attractive entry remains near $190, and we would not pay above $235.