Amphenol Poised For Growth With AI Server Boom, Rising Copper Content, CIT Acquisition: Analyst

Zinger Key Points
  • Citigroup analyst Asiya Merchant raised Amphenol's price target to $160, citing multiple revenue and EPS growth drivers.
  • Amphenol navigates rising copper costs successfully, with fiscal 2025 and 2026 EPS estimates higher than the Street.

Citigroup analyst Asiya Merchant maintained Amphenol Corp APH with a Buy and raised the price target from $135 to $160.

The analyst noted multiple levers that could drive upside potential to revenues and EPS over the next 12 to 24 months. 

This implies an improving connector market outlook, growing copper and fiber interconnect content opportunity in AI servers, and potential for further upside to EPS accretion from Carlisle Interconnect Technologies (CIT) acquisition, which closed on May 21. 

The company bought CIT for $2 billion in cash.

Rising copper costs could partially offset the impact, though Merchant noted that Amphenol has successfully navigated rising costs by passing them on to their customers, and other commodities like resin have been trending lower. 

Merchant’s current fiscal 2025 and 2026 EPS estimates are +2% and +4% higher vs the Street.

The updated price target reflects 35x current fiscal 2026 EPS vs. 33x fiscal 2025 prior.

In April, Amphenol reported a fiscal first-quarter 2024 sales growth of 9% year-on-year to $3.256 billion, beating the analyst consensus estimate of $3.097 billion. Adjusted EPS of $0.80 topped the analyst consensus estimate of $0.73.

Amphenol stock gained over 76% in the last 12 months. Investors can gain exposure to the stock via VictoryShares THB Mid Cap ETF MDCP and AdvisorShares Focused Equity ETF CWS.

Price Action: APH shares traded lower by 0.78% at $135.17 at the last check on Tuesday.

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