TE Connectivity plc (TEL) Economic Moat Analysis—

Moat—

Insufficient evidence for every rubric criterion; no category score is inferred.

structural advantage · — · Patents and manufacturing know-how identify plausible sources of differentiation, while automotive content growth demonstrates competitiveness. Neither establishes protected technology, costly customer switching or a relative cost advantage. A numerical structural grade would imply a competitive barrier that these passages do not demonstrate.

durability · — · The catalog supplies no patent-life analysis, customer program duration or demonstrated persistence of a protected advantage. Historical productivity improvement and current content growth show operating capability, but cannot establish how long competitors would be excluded from equivalent economics.

customer dependency · — · Increasing automotive content indicates greater product participation, but does not establish customers' dependence on TE specifically. The passages lack TE-specific replacement costs, qualification delays, sole-source arrangements or program retention outcomes. Orders and sales alone cannot establish material switching friction.

erosion resilience · 2/4 · Nine-month operating income rose to $2.898 billion from $2.295 billion despite $46 million of Transportation price erosion. This demonstrates operating resilience, although fiscal 2025 Transportation profit was adversely affected by pricing. Growth and productivity can offset pressure without establishing durable protection against competitors.

Pricing power50

Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.

realized pricing · 2/4 · Some businesses implemented price increases in response to costs and tariffs, but Transportation recorded $46 million of net price erosion in the first nine months of fiscal 2026, including $12 million in the third quarter. These are mixed observed outcomes; the catalog does not establish consolidated net pricing.

retention · 2/4 · Nine-month automotive organic sales increased 2.0%, primarily through increased content per vehicle, and third-quarter orders grew across all businesses. This indirectly supports continuing demand and customer engagement. It does not isolate retained customers, repeat program awards or customer behavior following price increases.

margin resilience · 2/4 · Calculated from reported amounts, consolidated nine-month gross margin increased from approximately 35.3% to 36.5%, and operating income increased. However, fiscal 2025 Transportation profit suffered from price erosion, which continued in fiscal 2026. Resilience is demonstrated but cannot be attributed primarily to pricing power.

contractual freedom · 2/4 · Implemented increases show some practical ability to change prices, while experienced downward pressure and continuing Transportation erosion demonstrate limits to commercial discretion. This supports a mixed assessment of effective pricing freedom. Unilateral reset rights, escalation provisions and TE-specific contract durations are not disclosed in the supplied passages.

Predictability87

5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.

Nondeclining revenue years (%)

50.00

Revenue growth volatility (pp)

5.19

Positive FCF years (%)

100.00

FCF margin volatility (pp)

2.94

observedAnnualPeriods

5.00

Financial strength81

Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.

debtFcfGrade

88.89

netDebtEbitGrade

72.35

interestCoverageGrade

100.00

currentRatioGrade

64.47

Debt / FCF (x)

1.78

Net debt / operating income (x)

1.38

Interest coverage (x)

41.70

Current ratio (x)

1.56

Capital allocation93

Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.

3-year pre-tax operating return (%)

18.47

3-year average dilution (%)

-2.76

3-year average SBC / revenue (%)

0.81

cashConversionGrade

100.00

Management69

Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.

capital discipline · 2/4 · Approximately $3.0 billion of year-to-date operating cash flow accompanied $2.0 billion returned to shareholders, demonstrating cash generation and actual distributions. The definitive Astrodyne TDI acquisition agreement adds a documented commitment. Acquisition returns, investment efficiency and repurchase value creation remain unestablished, limiting the assessment to mixed discipline.

incentive alignment · 3/4 · All named executives met fiscal 2025 year-end ownership requirements of six times salary for the CEO and three times for other senior executives. Annual incentives depend on company and segment performance. Eligible unvested holdings and a discretionary reserve qualify these strong arrangements; detailed long-term award outcomes are absent.

execution · 3/4 · Nine-month sales increased from $12.513 billion to $14.573 billion and operating income from $2.295 billion to $2.898 billion. Record third-quarter orders and increased automotive content corroborate strong execution. Management attribution remains indirect because demand, acquisitions and currency also affect results; Transportation pricing remains a constraint.

governance · 3/4 · The proxy discloses entirely independent standing committees and existing clawback provisions in executive incentive agreements alongside the adopted NYSE clawback policy. These are actual governance arrangements, supporting a strong grade. Their enforcement effectiveness and exceptional durability are not demonstrated by the supplied passages.