Amphenol Corporation

Amphenol Corporation delivered another all-around beat with an increase in operating margins. The company’s sales growth was driven by strong growth in automotive, commercial air, broadband, and military end markets. It generated strong operating free cash flow in this quarter and its operating margin increased on an adjusted basis, driven by robust operating leverage on the higher sales volumes and the benefit of ongoing pricing actions. The array of Interconnected mechanisms and products, and Antennas positions the company well. Recently, Amphenol closed the acquisition of Control Measure Regulation Group (CMR). This acquisition expands the offering of value-added, high-technology interconnect products of the company in the diversified industrial market. Moreover, Amphenol signed an agreement for the North American hybrid, fiber optic cable and cable assembly, and the global infrastructure antenna business of RFS in the quarter. This expands the product offering of Amphenol and its presence with the mobile network service providers continuing to invest in the next-generation 5G networks. We give Amphenol Corporation a ‘Hold’ rating with a revised target price.