Analyst Note| William Kerwin |
Narrow-moat Amphenol began 2021 in strong fashion, exceeding first-quarter top- and bottom-line guidance ranges while guiding for sequential second-quarter growth. We are raising our fair value estimate to $58 per share from $52 behind stronger 2021 growth assumptions. Amphenol is riding the wave of rebounding end markets to strong year-over-year sales growth--even more impressive considering its top line was more resilient to pandemic disruption last year than those of competitors. We think supply chain uncertainty led to a muted market reaction to Amphenol’s results, but we opine that Amphenol’s diverse market base and excellent execution will smooth over future speed bumps. Nonetheless, we continue to view shares as rich and would recommend waiting for a pullback.