Amphenol (APH) Hits 52-Week High On Healthy Growth Dynamics

Shares of diversified electronics manufacturer Amphenol Corporation (NYSE:APH) scaled a new 52-week high of $86.59 during Friday’s trading session, before closing a tad lower at $86.58 for a healthy year-to-date return of 28.7%. Barring minor hiccups, Amphenol’s share price has steadily been on an uptrend since early July. This Zacks Rank #2 (Buy) stock has the potential for further price appreciation with long-term earnings growth expectation of 10.2%.

Growth Drivers

Amphenol’s top-line growth is benefiting from improved end-market demand, new product rollouts and market share gains. Demand continues to be strong in automotive, industrial and military markets. The diversification in end markets, with consistent focus on technology innovation and customer support through all phases of the economic cycle has enabled the company to post solid performance over the past few quarters. A sustained drive for geographic and market diversification has further helped Amphenol to expand its customer base and develop new applications.

In addition, Amphenol remains encouraged by its expanding presence in the fast-growing commercial aerospace market and is well positioned to capitalize on the proliferation of electronics content in next-generation planes. These advanced electronic systems also require new higher technology interconnect solutions to enhance fuel efficiency and improve passenger experience, all of which create excellent opportunities for the company.

Despite the uncertainties prevailing in the global economy, Amphenol has bullish revenue and earnings expectations. The ongoing revolution in electronics enables the company to capitalize on the opportunities and strengthen its position in the market. It also expects to leverage on the solid growth potential of the acquired companies to drive robust performance in the future.

For 2017, Amphenol currently expects sales in the range of $6.62 billion to $6.70 billion, representing a year-over-year increase of 5-7%. The company expects adjusted earnings per share in the range of $3.06 to $3.10, an increase of 13-14% year over year. This represents a healthy improvement from the prior guidance of $6.41 billion to $6.53 billion in sales and adjusted earnings of $2.91 to $2.97 per share.

Such a bullish outlook with continued growth impetus and core focus perhaps boosted investors’ confidence and catapulted its share price to a new 52-week high.

Other Stocks to Consider

Some other stocks worth considering in the same space are AMETEK, Inc. (NYSE:AME) , Arrow Electronics, Inc. (NYSE:ARW) and AXT, Inc. (NASDAQ:AXTI) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AMETEK has a long-term earnings growth expectation of 11.4%. It topped estimates thrice in the trailing four quarters with an average positive earnings surprise of 3%.

Arrow Electronics has a long-term earnings growth expectation of 10.1%. It topped estimates thrice in the trailing four quarters with an average positive earnings surprise of 1.2%.

AXT has a long-term earnings growth expectation of 17.5%. It topped estimates thrice in the trailing four quarters with an average positive earnings surprise of 68.8%.

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