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Citi bullish on Amphenol stock, optimistic on Carlisle acquisition impact

EditorEmilio Ghigini
Published 04/04/2024, 04:34 AM

On Thursday, Citi maintained its Buy rating on Amphenol Corporation (NYSE:APH) stock and increased the price target to $135 from the previous $117. The adjustment reflects the anticipated benefits from the acquisition of Carlisle Interconnect Technologies.

The deal, expected to be finalized in the second quarter, is predicted to contribute approximately $900 million in annualized sales and have an estimated $0.15 annualized impact on earnings per share (EPS), excluding interest expenses from recent debt incurred to finance the purchase.

Amphenol, a manufacturer of electronic and fiber optic connectors, is also seen as well-positioned to benefit from increased spending on AI-related technology infrastructure. The company's IT Datacom segment, which accounts for 20% of its revenue, is particularly noted for its leading market position within this subsegment.

The analyst highlighted that connector content is approximately four times higher in the Blackwell GB200 architecture compared to DGX, indicating potential for increased demand for Amphenol's products.

The acquisition of Carlisle Interconnect Technologies aligns with Amphenol's strategic growth objectives and is expected to enhance its offerings in aerospace, military, and industrial sectors, among others. The deal is part of the company's ongoing efforts to expand its market reach and product portfolio.

Investors and analysts alike are anticipating Amphenol's upcoming earnings report, which is scheduled for April 24 at 1pm ET. The report will provide further insight into the company's financial health and the progress of integrating Carlisle Interconnect Technologies into its operations.

InvestingPro Insights

In light of Citi's positive outlook on Amphenol Corporation, current metrics from InvestingPro provide additional context to the company's financial landscape. Amphenol's market capitalization stands at a robust $69.21 billion, reflecting its significant presence in the electronics sector. Despite a slight decline in revenue growth over the last twelve months, the company maintains a strong gross profit margin of 32.53%, signaling effective cost management. Notably, Amphenol has a Price/Earnings (P/E) ratio of 35.7, which is relatively high, suggesting that the market has high expectations for future earnings growth.

InvestingPro Tips highlight that Amphenol has a history of consistent dividend growth, with dividends raised for 12 consecutive years and maintained for 20 consecutive years, indicating a reliable return to shareholders. Additionally, with the stock trading near its 52-week high and a 46.23% one-year total return, investors have shown confidence in the company's performance. For those looking to delve deeper into Amphenol's financials and future prospects, InvestingPro offers additional tips, including insights on the company's debt levels and liquidity. To explore these further, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro, where 16 more tips are available to help inform your investment decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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