Littelfuse Earnings: 2023 Is Looking Bumpy, but Shares Still Present Upside for Long-Term Investors

We trim our fair value estimate for narrow-moat Littelfuse to $310 per share, from $318, after it missed second-quarter profitability guidance and as the third-quarter outlook came in below our expectations. Littelfuse continues to see soft demand with customers working down elevated inventories built up during surging post-pandemic demand. These effects are particularly noticeable in Littelfuse's consumer and communications businesses, but are emerging in the heavy vehicle market as well. First-quarter results showed lessened effects that gave us optimism, but second-quarter results and third-quarter guidance below our model show that market dynamics continue to be bumpy. Longer term, we continue to have confidence in Littelfuse's strong position to benefit from electrification across its served markets, and in its stickiness with customers. Shares sold off an excessive 11% after the call, and we see upside at current levels.