Amphenol Earnings: Good Performance in Mixed End Markets Shows Fundamental Strength and Wide Moat

We maintain our $83 fair value estimate for shares of wide-moat Amphenol after the firm reported solid third-quarter results and guided for a decent fourth quarter. Amphenol continues to perform well amid mixed underlying end market results, which we see as evidence of the firm’s ability to grow content in end products and its operating resiliency. Electric vehicles, or EVs, continue to be a significant driver of growth for Amphenol, and we’re starting to see green growth shoots from artificial intelligence, or AI. We remain confident in Amphenol’s long-term growth drivers and its terrific structural profitability that undergirds our wide moat rating. We aren’t overly concerned about our expectation for a modest top-line decline this year as we see the firm outperforming its underlying markets and believe it is set up for good growth after 2024. We see shares as close to fully valued, but tout Amphenol as a blue-chip stock to buy upon a pullback.