Will Strong Portfolio and Acquisitions Drive APH Stock's 2026 Rally?

Amphenol APH shares have jumped 96.4% in the trailing 12 months, outperforming the Zacks Computer and Technology sector’s return of 22.6%. The company’s expanding portfolio of fiber optic, power, antenna and sensor technologies continues to gain traction across datacom, aerospace and defense markets. APH’s strategy of expanding business through acquisitions has been a key catalyst.

The company has outperformed peers, including TE Connectivity TEL, Corning GLW and Belden BDC in the past year. Shares of TE Connectivity, Corning and Belden have returned 62.6%, 87.5% and 1.4%, respectively, over the same timeframe.

APH Stock’s Performance

These factors justify a premium valuation as suggested by a Value Score of F. 

In terms of the forward 12-month price-to-earnings (P/E), APH is trading at 34.93X, higher than the broader sector and peers. The broader sector is trading at 27.78X while TE Connectivity, Corning and Belden trade at 21.61X, 29.97X and 14.73X, respectively.

APH Stock’s Valuation

Technically, APH is currently trading above the 50-day and the 200-day moving averages, indicating a bullish trend.

APH Stock Trades Above 50-Day & 200-Day SMAs

Diversified End-Markets to Aid APH’s Top-Line Growth

Diversified end-market bodes well for APH’s top-line growth prospects. The company expects fourth-quarter 2025 defense and commercial aerospace end-market sales to grow mid-single-digit on a sequential basis, respectively. Industrial sales are expected to grow at a moderate level on a sequential basis in the fourth quarter of 2025 and roughly 20% for 2025. Automotive sales are expected to grow in the mid-to-high single-digit range from 2024, while mobile device market sales are anticipated to grow in the low single-digit range from 2024. IT Datacom sales are expected to more than double from 2024 to 2025.

Rising AI workloads and cloud infrastructure upgrades are fueling demand for high-speed interconnects. This momentum is expected to support APH’s Communications Solutions segment. Electrification in transportation and rising electronic content in medical devices are driving the adoption of Amphenol’s cable assemblies and sensor-based systems. These drivers are expected to support steady growth in the Interconnect and Sensor Systems segment. 

Amphenol continues to expand its portfolio and market reach through targeted acquisitions across communications, medical and defense verticals. Plethora of acquisitions — Trexon, Rochester sensors, CIT, Lutze, CommScope’s Andrew business, LifeSync, Narda-MITEQ, XMA, Q Microwave, Rochester sensors and others — have been driving Amphenol’s prospects. CIT acquisition benefits the commercial aerospace end-market, with 2025 sales expected to increase in the high 30% range from 2024. The Rochestor sensors’ acquisition expands APH’s offering in the industrial market. The Andrew business is benefiting the communications end-market sales, with 2025 sales expected to jump more than 130%. 

The pending acquisition of CommScope’s Connectivity and Cable Solutions (“CCS”) business will expand Amphenol’s interconnect product capabilities in the fast-growing IT datacom market. The CCS acquisition will diversify Amphenol’s broad portfolio of fiber optic and other interconnect product solutions in the communications networks and industrial markets. The CCS business is expected to have sales and EBITDA margins of $3.6 billion and 26% in 2025, respectively, and is expected to close in the first quarter of 2026.

Strong Liquidity to Boost APH’s Growth Trajectory

Amphenol generates solid cash flow, which allows management the opportunity to invest in product innovations, acquisitions and business development. In the third quarter of 2025, operating cash flow was $1.47 billion or 117% of net income, whereas the free cash flow was $1.215 billion or 97% of net income.

Total liquidity at the end of the third quarter was $10.9 billion, including cash and short-term investments on hand of $3.9 billion plus availability under Amphenol’s existing credit facilities. Net debt was $4.2 billion, and APH had no outstanding borrowings under its revolving credit facility or its commercial paper programs. The improved balance sheet is expected to help APH pursue further acquisitions and continue shareholder-friendly initiatives. In the third quarter of 2025, the company returned $354 million through dividends and share buybacks. It raised its quarterly dividend by 52% to 25 cents per share to be payable beginning January 2026.

APH’s 2026 Earnings Estimate Revision Shows Positive Trend

The Zacks Consensus Estimate for 2026 earnings is pegged at $4 per share, up three cents over the past 30 days and indicating 21.4% growth from 2025’s consensus estimate of $3.29 per share. The consensus mark for 2026 revenues is pegged at $25.56 billion, suggesting 12.4% growth from the 2025 figure of $22.74 billion.
 

Amphenol Corporation Price and Consensus

Amphenol Corporation price-consensus-chart | Amphenol Corporation Quote

The Zacks Consensus Estimate for first-quarter 2026 earnings is pegged at 85 cents per share, unchanged over the past 30 days and indicating 34.9% growth over the year-ago quarter’s reported figure. The consensus mark for first-quarter 2026 revenues is pegged at $5.94 billion, suggesting 23.4% growth from the year-ago quarter’s reported figure.

Conclusion

Amphenol’s diversified end-market exposure, expanding interconnect portfolio and strong acquisition execution continue to support solid growth visibility. These factors justify a premium valuation.

APH currently has a Zacks Rank #1 (Strong Buy) and a Growth Score of B, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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