RBC Capital Raises Price Target on Amphenol (APH) to $65 Following Investor Meetings
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RBC Capital reiterated a Top Pick rating on Amphenol (NYSE: APH), and raised the price target to $65.00 (from $63.00), after hosting investor meetings with management. APH remains confident in ability to sustainably outgrow the industry driven by organic and inorganic initiatives. The company also remains committed to M&A program and noted that high FCF generation coupled w/ability to lever up, it has the bandwidth to execute larger transactions provided the right opportunities exist.
Analyst Amit Daryanani commented, "(1) Mobile Devices on track to see a muted H2:16 uptick (vs. H1:16) reflective of a challenged smartphone market. Stressed ability to capitalize on any upside to demand that may occur. (2) Military: APH noted “stop-ship” has been lifted by the DLA; APH doesn’t anticipate any share shift due to this and customers have been understanding/supportive. (3) IT/Datacomm: Remain positive driven by a confluence of share gains and extensive presence with hyperscale customers. (4) FCI integration: Several drivers for leverage on both top and bottom lines should drive significant upside (ex TCS GM is now the GM for FCI). (5) M&A: APH has the ability to do large acquisitions given ability to lever up and strong FCF generation. Maintaining Top Pick and increasing price target to $65 from $63 as we adjust our FTM EPS multiple from 23x to 24x to reflect improved sentiment."
Shares of Amphenol closed at $61.44 yesterday.
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