Amphenol Earnings: Another Flawless Quarter Drives Valuation to $55; We Like Dividend Increase

We raise our fair value estimate for wide-moat Amphenol to $55 per share, from $50, as we raise our long-term growth assumptions after a blowout quarter. Amphenol crushed its sales guidance by 10% and guidance for the third quarter was also nearly 10% above our model. We now forecast $1 billion in higher sales for Amphenol in 2024. Beyond that, we expect the firm to be able to maintain strong growth off of this higher base. We see order growth well in excess of sales growth as a positive leading indicator for future growth at Amphenol. Overall, Amphenol's demand looks healthy, with its diversified end-market exposure helping to offset pockets of weakness in the industrial market. This diversification, along with terrific profitability, drive incredibly consistent results and our wide moat rating. Shares pulled back about 5% after the release, which we attribute to upside being already priced into the market and a broader tech pullback. Still, we see shares as lightly overvalued.