TTM Technologies: M&A Drives Leverage Higher While Equity Market Worries About AI Growth

J.P. Morgan Credit Research reviews TTM Technologies' (NASDAQ: TTMI) 3Q26 results: record revenue of $1,203mn (+60% y/y) beat the $1,126mn consensus, adjusted EBITDA reached a record $242mn (20.1% margin) and non-GAAP EPS was $1.46 versus $1.25 expected, yet the stock fell about 28% as triple-digit Data Center growth still disappointed and the 4Q26 revenue guide was merely in line. Management is pursuing an aggressive debt-funded M&A program—five deals announced or closed this quarter, including the $650mn all-cash Ophir Optics carve-out—lifting net leverage to 2.8x from 0.9x, with an additional $400mn of capacity investment. The projected return to the 1.5-2.0x target depends on strong free cash flow, clean integration and no further M&A. We maintain Underweight, seeing limited upside and meaningful downside skew for creditors until deleveraging is demonstrated.