As previously reported, Evercore ISI analyst Amit Daryanani downgraded TE Connectivity to In Line from Outperform with an unchanged price target of $130. While expectations are set for about 3% growth in auto production in FY23, driven by increased semi supply, he thinks chip supply will continue to constrain the upper bound and believes production is approaching levels where "demand will be more heavily scrutinized," Daryanani tells investors. Street estimates imply a strong, roughly 200 basis point operating margin ramp from the first half to the second for TE, but there is risk that it will be harder for TE to pass-through price increases with automakers rapidly raising incentives now that demand is weaker, Daryanani said.
Published first on TheFly
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