Bernstein SocGen Group Starts Amphenol (APH) at Outperform

Bernstein SocGen Group analyst Varun Govindaraj initiates coverage on Amphenol (NYSE: APH) with a Outperform rating and a price target of $99.00.

The analyst comments: “APH is our preferred way to play the interconnect space. We like their overweight exposure to high growth end markets and ability to grow faster than the underlying markets they serve. They are also the market leader on copper interconnects in data centers and seem to be winning share in the segment. APH is also well-positioned on the copper vs. optical debate and we think they will come out as winners regardless of the direction of travel. Their acquisition of CommScope was reasonably priced at ~11x EV/ EBITDA and adds passive optical content as well as technology for components like fiber array units (FAUs). We believe APH’s inorganic strategy has served them well, and think that they can continue to acquire and effectively integrate targets. Key to their success is their decentralized, GM-led model; few companies can operate this way effectively and we think this structure serves their M&A engine well. While the stock is optically (pun intended) expensive at ~28x NTM earnings, we think their ability to deliver LDD growth and margins ~30% over the next five years warrant the premium valuation.”

For an analyst ratings summary and ratings history on Amphenol click here. For more ratings news on Amphenol click here.

Shares of Amphenol closed at $82.84 yesterday.

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