TE Connect (TEL) with a small but unusual buy of 300 June 2025 $165 calls aggressively with a sweep at the $6.40 offer on 10-1. TEL lacks any other notable open interest outside of 220 April $140 calls bought for $18.50 in an adjustment trade on 8/22.

TEL’s weekly chart has consolidated for months and MACD remains negative on the weekly with RSI right at 50. A move above $151 and then $160 resistance levels can eye $166 highs from 2021 while Fibonacci extension targets would rest at $180.50, $189.50 and $204.

TEL is a global industrial technology providing a broad range of connectivity and sensor solutions, proven in the harshest environments, enable advancements in transportation, industrial applications, medical technology, energy, data communications, and the home. Transportation Solutions, Industrial Solutions, and Communications Solutions are its three business segments with Transportation accounting for 60% of revenues, Industrial 28% and Communications 12%. Automotive products account for 72% of the transportation segment revenues. The third and fourth fiscal quarters are usually the strongest quarters seasonally.

TEL has a market cap of $44.8B and trades 17.9X Earnings, 12X EBITDA and 15.4X FCF with a 1.65% dividend yield. TEL is trading at the 7^th percentile on P/FCF and 18^th percentile on trailing P/E versus is 10-year range. TEL margins are in the 95^th percentile. Current forecasts see modest toppling growth of 5-7% annually with similar EBITDA growth rates. TEL shares have lagged the last two years on destocking across end-markets but looks poised to return to a solid grower. Connectivity is set to benefit from major secular growth trends like electrification and AI.

Looking over TEL’s earnings call in July management noted stability globally in its key Auto segment and the communications segment is seeing acceleration from AI applications. China auto growth has helped offset weakness in Europe. TEKL expects content growth in Auto driven both by increased electric vehicle and hybrid production and greater electronification of the vehicle.

TEL’s capital allocation strategy is to return approximately two-thirds of free cash flow to shareholders and use approximately one-third for bolt-on acquisitions over time.

TEL is trading at attractive levels with a lot of potential to become a beat and raise name that will re-rate higher with stronger growth and margins.