TE Connectivity Ltd. (TEL) DCF Valuation
TGM's two-stage DCF values TE Connectivity Ltd. (TEL) between $115.42 and $206.50 depending on assumptions, with a base case of $153.16. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth), fading to 2.5% long-run; the discount rate (9.9%) reflects its beta.
What would today's price require?
$217.64 is justified only if free cash flow grows about +18.7% a year (fading to 2.5% long-run) at a 9.9% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 7.5%/yr | 10.9% | $115.42 |
| Base case | 10.5%/yr | 9.9% | $153.16 |
| Optimistic | 13.5%/yr | 8.9% | $206.50 |
| Analyst DCF (FMP) | independent reference — different model | $175.10 | |
Current Price
$217.64
Market-Implied Growth
+18.7%/yr
vs +13.7% 5Y actual
Model Scenario Range
$115.42 – $206.50
model output — not a price target
TEL DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for TEL (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $2.6B · 0.29B shares · net debt $4.9B
Estimated Fair Value
$205.06
-5.8% vs $217.64
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 10.5%/yr FCF growth and 10-year horizon fixed. Green = above today's $217.64; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 7.9% | $264 | $280 | $299 | $322 | $351 |
| 8.9% | $221 | $232 | $245 | $259 | $277 |
| 9.9% | $188 | $196 | $205 | $215 | $227 |
| 10.9% | $163 | $169 | $175 | $182 | $190 |
| 11.9% | $143 | $147 | $152 | $157 | $163 |
About TE Connectivity Ltd.
Operating globally across Europe, the Middle East & Africa, Asia Pacific, and the Americas, TE Connectivity Ltd. (TEL) specializes in the engineering and distribution of advanced connectivity and sensor technologies. The company structures its diverse operations into three primary business units: 1. Transportation Solutions: This segment delivers critical components such as terminals, sophisticated connector systems, various sensors, relays, antennas, heat shrink tubing, and specialized application tooling. These products are vital for the automotive, commercial vehicle, and broader sensor manufacturing sectors. 2. Industrial Solutions: This division provides an array of components including terminals, connector systems, heat shrink tubing, interventional medical devices, relays, and an assortment of wires and cables. Its extensive client base spans industries like aerospace, defense, oil & gas, general industrial equipment, medical devices, and energy. 3. Communications Solutions: Focused on electronic components, this unit supplies terminals, connector systems, relays, heat shrink tubing, and antennas, primarily serving the data & devices and appliance markets. TE Connectivity Ltd. distributes its offerings to customers in approximately 140 nations, predominantly through direct sales to original equipment manufacturers, supplemented by a network of third-party distributors. Established in 2000, the company is headquartered in Schaffhausen, Switzerland, and changed its name from Tyco Electronics Ltd. to TE Connectivity Ltd. in March 2011.
- Sector
- Technology
- Industry
- Hardware, Equipment & Parts
- CEO
- Heath A. Mitts