Amphenol Earnings: Market Weakness Creates a Rare Buying Opportunity for an Unflappable Operator

We maintain our $83 per share fair value estimate for Amphenol after a strong first quarter and guidance for second-quarter moderation. Inventory digestion at data center and mobile network customers is depressing demand for Amphenol’s communications products, but other end markets remain healthy. Despite a downturn in several of its markets, Amphenol’s profitability shows remarkable resilience. The firm’s ability to efficiently manage expenses with a localized cost structure, even during periods of weak demand, is a key tenet of our wide economic moat and exemplary capital allocation ratings. Amphenol stock is trading more than 10% below our fair value estimate in response to short-term market weakness. We see its modest selloff as short-sighted and recommend investors buy into the blue-chip company while it’s at a discount.