Amphenol Earnings: We Raise Our Valuation With a Higher Growth Forecast

We raise our fair value estimate for wide-moat Amphenol to $64 per share, from $55, as we lift our growth forecast for the firm. Amphenol’s demand is booming in 2024 across its end markets and particularly for data center products that serve AI applications. We expect strong demand to endure through 2025. The firm’s third-quarter results were well above our above-consensus expectations, and we expect rapid growth to continue in the short term. We also now factor in an earlier expected closing for Amphenol’s $2.1 billion acquisition of pieces of CommScope (formerly Andrew Corporation, acquired by CommScope in 2007). We still see Amphenol’s normal growth in the mid to high single digits longer term and believe it can achieve this growth even off our higher 2025 revenue estimate. Shares look fairly valued to us for this high-quality stock.